A statement from the VBA regarding the Lacrosse VCAT decision

Friday, 8 March 2019

The Victorian Building Authority (VBA) welcomes the decision of Vice President Judge Woodward of the Victorian Civil and Administrative Tribunal (VCAT) in the proceedings brought by the owners of the Lacrosse building against LU Simon Builders Pty Ltd and others.

This is an important decision for consumers, with VCAT awarding the owners initial compensation of $5.7 million. This amount could increase substantially, because VCAT is yet to hear submissions from the parties on rectification costs of $6 million being claimed by the owners.

The Judge found the building did not comply with the Building Code of Australia (BCA) (as then applicable in 2011) because of the use of combustible aluminium composite panels (ACP) on the external walls of the building.

The decision confirms the VBA's long-standing position that ACP with a 100 per cent polyethylene core does not meet the deemed-to-satisfy provisions of the BCA.

VCAT held that ACP of the kind used on the Lacrosse building is clearly combustible based on testing conducted by CSIRO. VCAT also rejected the validity of "the peer professional opinion" defence – an argument commonly advanced by building practitioners to justify the use of ACP on external walls at the time – on the basis that everybody had misinterpreted the requirements of the BCA.

VCAT also held LU Simon breached warranties of suitability to owners under its Design and Construct contract and is therefore primarily responsible for paying compensation. The tribunal found the fire engineer, building surveyor and architect failed to exercise due care in providing services to LU Simon, ordering them to reimburse the builder a respective 39 per cent, 33 per cent and 27 per cent of the total damages payable by LU Simon to owners.

This decision confirms that all building practitioners are responsible for ensuring their building work complies with the requirements of the BCA and all relevant legislation, and that they need to exercise care when selecting building products, to avoid any potential risk to the safety of occupants.

Non-compliant combustible cladding is a serious issue facing the Victorian community. The VBA has now inspected more than 1400 privately-owned buildings, with the owners of more than 600 properties having to consider fire safety risks.

The recent apartment fire in Spencer Street emphasises the importance of identifying and addressing combustible cladding. This issue can be resolved most effectively by industry urgently stepping forward to work collaboratively with the VBA to address this public safety risk.

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