In October 2024, the Victorian Building Appeals Board (BAB) delivered a decision resolving a combustible cladding compliance case concerning a large apartment complex in the heart of Melbourne. 

The matter involved the Owner’s Corporation of “The William” Building, a multi-apartment tower building in the central city. The Owner’s Corporation was represented by Lovegrove & Cotton Construction and Planning Lawyers, with Director Justin Cotton being the solicitor with conduct of the Applicants’ proceedings. 

The case addressed the question of whether aluminium composite panels (ACP) with a fire-retardant core could remain on the building’s façade under the Building Code of Australia. The BAB concluded that the panels complied with the performance requirements and could remain. 

The nature of the proceeding and the relief sought is as follows: 

An application commenced with the Building Appeals Board for a determination that the retention of all of the existing Alpolic/FR combustible (external wall) cladding installed on a Class 2, 3, 5, 6 and 7a building complies with Performance Requirements CP2 and CP4 of the Building Code of Australia 2011 – Volume One(“BCA”)¹. 

This decision not only saved the Owners Corporation from significant remediation costs but also averted protracted and very expensive multi-party litigation. It was a great relief to the strata community. 

Background of the Cladding Compliance Case 

The dispute arose following the redevelopment of the building between 2012 and 2014. The project created two multi-storey towers, linked by a sky bridge, and included residential apartments, a hotel, and commercial spaces. The first Occupancy Permit was issued in September 2014. 

This case involved the following parties: 

Owners Corporation PS648185V (Applicant) – Represented the landowners seeking determination on whether retaining combustible cladding would be compliant with safety codes. 

Municipal Building Surveyor for the City of Melbourne (First Interested Party) – Monitors compliance and fire safety, initially raised concerns about cladding risks. 

Fire Rescue Commissioner (Second Interested Party) – Focuses on fire safety, particularly access for firefighting and potential risks posed by the cladding. 

Victorian Building Authority (Third Interested Party) – Provides regulatory oversight, supporting compliance assessments and legal interpretations. 

Relevant Building Surveyor (Fourth Interested Party) – Involved in issuing occupancy permits but did not participate in hearings. 

Built Vic Pty Ltd (Fifth Interested Party) – Building contractor, had made no substantive submissions. 

In November 2019, the Melbourne City Council issued a Building Order requiring action regarding the building’s external cladding. This was based on concerns that the ACP panels, while classified as fire-retardant with less than 30% polyethylene, were still combustible materials that could potentially compromise occupant safety in a fire. The Building Order required the Owners Corporation to: 

(a) Remove/replace all the combustible ACP cladding on the building with a material compliant with the BCA. 

OR 

(b) Remove and replace all the combustible ACP cladding on the building as far as is reasonably practical whereby it can be demonstrated (to be verified through a Section 160A application via the Building Appeals Board, for design determination) that the cladding extent and configuration satisfies the BCA performance requirements². 

The Owners Corporation disputed the Building Order, asserting that the cladding complied with the Building Code of Australia. On 2 January 2020, the Applicant subsequently made an application to the BAB for such a determination³. 

The application made by the Applicant was pursuant to section 160A(1) of the Building Act 1993 (Act) seeking a determination that retention of all existing combustible cladding installed on a Class 2, 3, 5, 6 and 7a building complies with Performance Requirements CP2 and CP4 of the BCA⁴. 

A Timeline of Events 

Key Milestones in the Compliance Process: 

• 2012–2014: Redevelopment of the property created a multi-storey complex in central Melbourne, featuring residential apartments, a hotel, and commercial spaces. 

• September 2014: An Occupancy Permit was issued, by the relevant building surveyor signifying project completion. 

• November 2017: The Occupancy Permit was amended following a supplementary fire engineering report. 

• November 2019: A Building Order was issued, mandating the removal or replacement of the ACP cladding. 

• 2020–2024: Proceedings before the BAB involved extensive testing, expert conclaves, and multiple reviews by relevant agencies. 

• October 2024: The BAB ruled that the cladding met the performance requirements of the 2011 Building Code and could remain in place, with no remedial work needed. 

Role of Expert Reports and Testing 

Central to the case was the use of Alpolic/FR ACP cladding, which has a fire-retardant core with less than 30% polyethylene. Testing conducted by CSIRO and other experts included small- and intermediate-scale mock-ups of the cladding and insulation systems⁵. These tests eventually demonstrated that: 

• The cladding did not propagate significant fire spread. 
• Fire barriers at each floor provided additional containment. 
• The building’s active and passive fire safety measures, including sprinklers and compliant egress paths, mitigated overall risks. 

A key finding was the presence of polyester batts in the cavity, which, while combustible, were separated from the ACP cladding by sarking and steel channels, significantly reducing fire risk. Expert conclaves provided further evidence that the cladding’s configuration satisfied the Building Code’s performance requirements CP2 and CP4⁶. 

These findings were presented in the expert report prepared by SKIP Consulting Pty Ltd. A key conclusion from the report was as follows: 

‘The ACP cladding … and combustible polyester insulation does not ‘pose a risk to the life of any occupants using the building’ as described in the building notice and building order and is compliant to the relevant performance requirements of the BCA’⁷. 

Some of the Challenges 

Throughout the process, there had to be a navigation of some of the conflicting opinions. While CSV classified the building as “not high risk” and declined to provide rectification funding, other regulatory bodies, including the VBA and Fire Rescue Victoria, maintained that the cladding posed a fire safety risk. 

Without CSV funding, the Owners Corporation had to independently engage experts and fund the BAB proceedings. However, these efforts ultimately saved the Owners Corporation from facing extensive remediation costs and having to pursue potential litigation. The decision averted the need for expensive multi-party legal disputes. 

The Victorian Building Appeals Board’s Decision 

The BAB concluded that: 

• The applicable version of the Building Code was the 2011 edition, as it governed the original construction. 
• The ACP cladding complied with CP2 and CP4, given the fire-retardant core and mitigating fire safety measures in place. 
• The cladding could remain, as it did not materially increase fire risks to occupants or the building’s façade. 

The findings further considered the expert opinions and concluded that the retention of the Alpolic / FR did not materially increase the risk of fire spread to the façade of the Building, or otherwise materially compromise the fire safety of the persons within the building⁸. 

Adjunct Professor Kim Lovegrove has praised the BAB’s model, noting that its multi-disciplinary panel and swift hearing process—typically lasting no more than 1-2 days—aligns with international best practices for dispute resolution. The BAB has proven to be a sustainable and highly effective institution for resolving complex building compliance disputes. 

Implications of the Decision 

The decision has significant implications for both the Owners Corporation and the wider construction industry. It highlights the importance of robust evidence, technical analysis in compliance disputes and deployment of lawyers that have a high level of expertise in this niche jurisdiction. 

Furthermore, the ruling emphasizes the practicality of addressing cladding issues through case-specific solutions rather than blanket removal mandates. 

Recent guidelines encouraging collaboration between regulators and Owners Corporations, including partial rectification options, reflect a shift toward more pragmatic approaches. This decision provides a precedent for other strata communities facing similar challenges, balancing safety, financial considerations, and practical outcomes. 

This case highlights the BAB’s role as an effective dispute resolution forum, supported by a panel of multi-skilled decision-makers. Adjunct Professor Kim Lovegrove, an international expert on building regulatory reform, often describes the BAB as exemplifying international best practice. Its swift hearings and sustainable operations over many years provide a valuable template for other jurisdictions.

Key Takeouts 

1. Sustainable Dispute Resolution 

• The BAB’s multi-disciplinary panel approach demonstrates its ability to resolve technical disputes effectively. 

2. Collaborative Evidence is Essential 

• Extensive testing and expert conclaves provided the robust evidence needed to demonstrate compliance. 

3. Case-Specific Flexibility is Key 

• This case reinforces the value of tailored compliance assessments over one-size-fits-all solutions, particularly for complex matters like cladding. 

4. Avoiding Litigation Benefits Owners 

• The outcome saved the Owners Corporation from costly multi-party litigation and expensive remediation works, providing a practical and equitable resolution. 

5. International Comparisons 

• The BAB’s model holds up well against international benchmarks, serving as a valuable example of best practices in building dispute resolution. 

Conclusion 

The Victorian Building Appeals Board’s decision in October 2024 is an important example of how well-structured dispute resolution processes can deliver practical, equitable outcomes. The ruling balanced public safety concerns with financial realities, allowing cladding to remain on a performance-based approach and averting unnecessary litigation. The holistic active and passive fire safety provisions at this building were also taken into consideration. 

The BAB’s structure, involving multi-skilled decision-makers, underscores its value as a model for international best practice. Its efficient processes, demonstrate the sustainability and effectiveness of its approach. This outcome not only saved the Owners Corporation from considerable costs but also provided a clear precedent for future cladding disputes. 

By focusing on evidence-based assessments and collaborative solutions, this decision offers a pathway for addressing combustible cladding issues in a way that safeguards both public safety and the financial well-being of apartment owners.

Disclaimer 

The information provided in this article is for general informational purposes only. It does not constitute legal advice. For specific legal advice related to building regulations and compliance, please consult a construction lawyer. 

Lovegrove & Cotton Construction and Planning Lawyers

For more than thirty years, Lovegrove & Cotton have provided advice and represented Owners Corporations, Building Practitioners and regulators in building and planning regularisation matters. If you wish to engage the firm, feel free to contact us via our website, by emailing enquiries@lclawyers.com.au, or by calling on (03) 9600 4077.

Footnotes

1. In the matter of 189-203 Willaim Street, Melbourne [2024] BAB 452215 ↩︎
2. In the matter of 189-203 Willaim Street, Melbourne [2024] BAB 452215 [12] ↩︎
3. In the matter of 189-203 Willaim Street, Melbourne [2024] BAB 452215 [13] ↩︎
4. In the matter of 189-203 Willaim Street, Melbourne [2024] BAB 452215 [1] ↩︎
5. In the matter of 189-203 Willaim Street, Melbourne [2024] BAB 452215 [23] ↩︎
6. Important New Building Appeals Board Decision Regarding Cladding and a Multi-Unit Development ↩︎
7. In the matter of 189-203 Willaim Street, Melbourne [2024] BAB 452215 [21] ↩︎
8. In the matter of 189-203 Willaim Street, Melbourne [2024] BAB 452215 [57] ↩︎