The Lacrosse Apartment Fire: Liability for Using Grenfell Style Cladding

INTRODUCTION

The outline similarities between the Lacrosse apartments fire in Melbourne and the Grenfell Tower disaster are striking. The Melbourne Fire Brigade Post Incident Analysis Report painted a damning picture, finding that the ‘Alucobest’ aluminium composite material (‘ACM’) cladding “contributed to the fire load and the rapid spread of the fire up the vertical face of the building to the floors and balcony areas located above”.

On 28 February 2019, Woodward J, sitting in the Australian Victorian Civil and Administrative Tribunal (“VCAT”) in Owners Corporation No.1 of PS613436T v LU Simon Builders Pty Ltd (Building and Property) [2019] VCAT 286, handed down a decision that provides an important comparative lens. While Woodward J did not expressly refer to the Grenfell Tower fire, he reflected that “[m]ore recent events show that the safe evacuation of the more than 400 residents of the Lacrosse tower is an outcome that should not go unremarked” (para. 3). He noted (para. 10) that his “reasons should not be read as a commentary generally on the safety or otherwise of ACPs [aluminium composite panels] and their uses”. Nevertheless, the Lacrosse fire, the resulting civil proceedings and Woodward J's conclusions deserve close attention.

The building project

The developer of the Lacrosse tower was 675 La Trobe Street Pty Ltd. The main contractor / builder, LU Simon, entered into a ‘Design and Construct’ (‘D&C’) contract with a specification for ACPs (drawn up by the project consultancy team) “indicative to Alucobond”. This is a commonly used brand of cladding which represents a range of products. Although a different product, ‘Alucobest’, was installed, the judge found that the fire did not start or spread because Alucobest had been used in place of Alucobond. Woodward J held that it was the use of an ACP with a combustible polyethylene core that was primarily responsible for causing the spread of the fire up the building.

Woodward J rejected the submission that this kind of ACP complied with Building Code of Australia (‘BCA’) standards. He accepted, however, that in 2011 there was a poor understanding among building professionals (at least in Australia), save for fire engineers, of the fire risks associated with ACPs (para. 301).

The fire spread

Mr Gubitta came home from work at midnight on 24 November 2014. He went out to the balcony to smoke and left a cigarette butt in a plastic food container. At 2:23 am, a smoke detector sent an automated alarm to the Metropolitan Fire Brigade. When they arrived, the fire had climbed to level 14; six minutes later, it reached the roof of the tower above level 21. Fire crews completely evacuated more than 400 residents.

The proceedings

The 211 applicants, or claimants, were the owners of the apartments, acting either individually or through the owner corporation (or ‘strata title’) owners. The VCAT held that liability fell on:

• The main contractor itself, LU Simon Pty Ltd;
• The building surveyor, Stasi Galanos, and his employer Gardner Group Pty Ltd;
• The architects, Elenberg Fraser Pty Ltd;
• The fire engineer, Tanah Merah Pty Ltd trading as Thomas Nicolas; and
• Mr Gubitta (the smoker).

The claim against the contractors

The Owners’ claim against LU Simon was based on breach of warranties implied into the D&C contract by Section 8 of the Domestic Building Contracts Act 1995 (Vic): 8(b) (materials used are suitable for purpose), (c) (the work will comply with all legal requirements), and (f) (the work will be fit for its purpose). They are implied into all contracts concerning domestic building work and as they are strict they cannot be satisfied by taking reasonable care (Barton v Stiff [2006] VSC 307). Although the contractor was found in breach of these strict warranties, it was not held to have failed to exercise reasonable care in the construction of the Lacrosse tower by installing combustible panels. On the facts of this case, the builder was dependent on the professional skills of the consultants that were engaged (paras. 306-308). This would not apply in every case: there will be many instances where it would be reasonable for a contractor to identify errors by another building professional (para. 308).

The claim against the fire engineer

The fire engineer failed to conduct a property fire engineering assessment. Furthermore, he should have known that the cladding chosen was not BCA compliant. Woodward J observed that the fire engineer, having knowledge of the risk of ACPs, “was therefore uniquely placed to raise the red flag on the use of the ACPs” (para. 595).

The claim against the building surveyor

Gardner Group breached its Consultant Agreement with the developer (and later novated to LU Simon) by failing to exercise due care and skill in issuing the building permit for Stage 7 of the construction, thereby approving the ACPs. Furthermore, the building surveyor also failed to notice and query the incomplete description of the cladding systems in the fire engineer’s Fire Engineering Report.

The claim against the architects

In this project, as in many others, the architects were the ‘lead consultants’, steering the design team. Woodward J found that Elenberg Fraser failed to exercise due care and skill in remedying defects in their design: the Alucobond specification was not compliant with the BCA and was not fit for purpose. Further, they failed as the head design consultant to ensure that the ACP was compliant with their design intent. Woodward J held that the firm was “in breach by effectively abdicating its responsibilities as head design consultant” (para. 452). Despite the presence of a specialist fire engineer on the design team, the architect was therefore held out for especial criticism. The judgment is therefore of especial concern to architect practices.

Apportionment between the Respondents

Part IVAA of the Wrongs Act 1958 (Vic.) allows a defendant to reduce its liability based on the comparative responsibility of other parties that have been joined to the proceedings. Woodward J held that as the building surveyor, architects, and fire engineer had failed to exercise reasonable care they were concurrent wrongdoers under s. 24H. The VCAT held that it was their failures that caused LU Simon to breach of the D&C contract within the meaning of s. 51 of the 1958 Act. As a result, damages were apportioned pursuant to Part IVAA of the 1958 Act as follows:

• The building surveyors (33%)
• The architect (25%)
• Mr Gubitta (the smoker) (3%).

However, no party sought to claim against Mr Gubitta. Therefore, LU Simon were unable to apportion the 3% and will be required to pay it themselves.

CONCLUSION

The decision “sends shudders through building industry consultants and governments”. It is likely, however, that the decision will be the subject of an appeal to the Supreme Court of Victoria. At the same time, a product liability class action claim has been launched against the producer of Alucobond PE-core ACPs. The case demonstrates the limited knowledge of the risk of ACPs in 2011 amongst building professionals; as they were a commonly used product, its use on the Lacrosse tower did not trigger any concern. Notwithstanding this, the owners and the contractor were able to establish liability against the building surveyors, the fire engineer, and lead design consultants, namely the architects, who might be felt to have particular unease about this decision.

There are a number of points of comparison that can be drawn in respect of this litigation and the Grenfell Tower disaster. Design responsibility (including the choice of cladding materials) in a project might well be shared: one of Dame Judith Hackitt’s recommendations as to improving building regulations and fire safety, at para. 2.10, was to create “greater clarity around: the key roles involved in the shaping and overseeing of the procurement, design and construction of buildings; and the key responsibilities/accountabilities that should flow from these roles”. The process of determining how unsafe materials came to be used, and then to apportion liability for the same, is not at all straightforward: the Lacrosse fire case ran for 22 days. Such delays can leave the blameless residents out of pocket for considerable periods of time.

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How to cite this blog post (Harvard style) 

Sawtell, D. and Maxwell, D. (2019). The Lacrosse Apartment Fire: Liability for Using Grenfell Style Cladding. Available at: https://www.law.ox.ac.uk/housing-after-grenfell/blog/2019/03/lacrosse-apartment-fire-liability-using-grenfell-style-cladding (Accessed [date]).