‘Non-compliant’ cladding issues update26 October 2016 | Property Claims
Earlier this year in May 2016, we reported on the implications for insurers arising out of non-compliant cladding, an issue sparked by the fires at Melbourne Dockland’s Lacrosse Apartments.
We now report on further developments.
Disciplinary action by the VBA
Since the Victorian Building Authority’s (VBA) referral of the relevant building surveyor for the Lacrosse Apartments to the Building Practitioners’ Board (BPB) for disciplinary action, in June 2016 two more building practitioners involved in the building of the Lacrosse Apartments have also been referred to the BPB. These practitioners are the registered builder and the fire safety engineer who prepared a fire engineering report in relation to the building work at the site.
While the VBA has indicated that their investigation into the conduct of the building practitioners involved in the Lacrosse building has now concluded, the BPB is yet to make its determinations in relation to the practitioners’ conduct.
Interpretation of the Building Code
On 24 February 2016, the VBA first issued an industry alert in relation to external walls and compliance with the National Construction Code (Code), which was updated on 28 June 2016 (Alert). The VBA indicated that the purpose of the Alert is to clarify circumstances where aluminium composite panels (ACPs) and other combustible materials in the construction of external walls. Specifically, the VBA outlined its interpretation of various clauses of the Code.
In response to the focus on cladding systems in the building industry, the Australian Institute of Building Surveyors (AIBS) has produced a report, ‘Issues Relating to the Use of External Wall Cladding Systems in Australia’ and a technical discussion paper ‘External Cladding Systems and the BCA’, available here. Interestingly, the AIBS report and technical paper compare the interpretation of the Code put forward by the VBA in its Alert with those from industry professionals. Namely, the AIBS provides an outline of how the use of external wall systems with combustible content, including APCs, have been permitted under the Code, which is in direct conflict with the conclusion of the VBA’s interpretation of the Code as expressed in its Alert that use of combustible material in external wall systems are non compliant with the Code.
The role of the VBA
Another issue discussed by AIBS is the role played by the various regulatory building authorities, such as the VBA, in administering and enforcing building regulations and the associated exercise of professional and expert judgement. AIBS has however expressed concerned that the Alert was developed by the VBA without industry consultation.
To this, we note that the functions of the VBA as outlined in the Building Act 1993 (Building Act) include:
- to monitor and enforce compliance with the Building Act and the regulations; and
- to provide information on matters relating to building standards, the regulation of buildings, building work and building practitioners.
Ultimately, the VBA is given very broad powers to “do all things necessary of convenient to enable it to carry out its functions”. 
In light of the above, it is clear that non-compliant cladding remains very much a live and current issue in the construction industry. It follows that construction professionals and their insurers should keep a close eye on further developments as they arise.
 Building Act s 198.