By: Sarah Metcalfe, Andrew Brennan and Nick Lux

At a glance

• Cladding Safety Victoria (CSV) has released a report investigating who is responsible for the use of non-compliant combustible cladding in Victoria.
• CSV reviewed original plans and permits for 1,000 privately owned apartment buildings and concluded that responsibility for the ‘widespread misapplication of Victoria’s regulatory requirements for external wall cladding’ is shared between architects/draftspersons, fire safety engineers and building surveyors involved in the design and approval process.
• The CSV Report is narrow in focus and does not examine how regulatory bodies or the Australian Building Code Board may have contributed to the widespread use of non-compliant cladding in Victoria.
• The CSV reform recommendations reflect reforms introduced in NSW in the Building Practitioners Act 2020 (NSW) and are consistent with recommendations made by the Victorian Government-appointed Expert Panel on Building Reforms in its Stage 2 report.

Cladding Safety Victoria has published a report (CSV Report) investigating who is responsible for the non-compliant use of combustible cladding in Victoria. We set out below a high-level summary of the report, CSV’s findings, and recommendations.

The investigations of CSV focused on the professionals involved in the design and construct process – namely architects/draftspersons, fire safety engineers (FSE) and relevant building surveyors (RBS). The findings follow CSV reviewing records for a total of 1,000 Class 2 buildings (residential apartment buildings)¹ of which ‘robust conclusions’² could be reached in relation to about 804 buildings. For the purposes of the report, CSV determined the use of aluminium composite cladding (ACP) or expandable polystyrene cladding (EPS) was non-compliant if CSV was able to verify that:

• building plans specified the use of an ACP or EPS product, and
• a performance solution was not developed for the use of the specified product.

The CSV Report addresses the compliance pathways available to professionals. CSV express the view that combustible cladding could not satisfy the test for combustibility provided by AS1530.1, meaning such products could not meet the deemed-to-satisfy (DTS) pathways for compliance. In turn, the alternative performance solution compliance pathway could only be met if a product satisfied the performance requirements, and the RBS issued a performance solution determination. This somewhat simplistic approach meant that CSV did not evaluate whether a (non-compliant) product was installed as a cladding, lining or attachment and whether any of the DTS pathways may have applied to the specification of the cladding product in any of the projects which were the subject of its investigations.³

Findings

Key findings from CSV’s analysis include⁴:

• ACP or EPS was specified on 603 out of 804 buildings (75%)
• a fire safety engineer prepared a fire engineering report for 426 buildings (71%)
• a fire safety engineer only assessed the suitability of the combustible cladding against the performance requirements of the BCA in 63 (of the 426) buildings (15%)
• for the 603 buildings where ACP or EPS was specified, a performance solution was prepared for matters other than combustible cladding for 362 buildings (60%) and prepared addressing the suitability of combustible cladding for only 66 (of the 603) buildings (11%)
• in 90% of cases, the combustible nature of the ACP or EPS was not addressed in a performance solution developed by a FSE, and
• of 731 Building Permits reviewed, performance solutions were not listed on either building or occupancy permits for 81 buildings (11%), even though fire engineering reports were located assessing departures from DTS requirements and assessing suitability for performance solutions.

The report provides a high-level summary of the professional obligations⁵ of each of the professionals. In looking at the extent of the non-compliant use of combustible cladding, CSV assumed that there was not a deliberate and conscious disregard of law amongst professionals, but rather, the professionals either did not know that external wall cladding on apartment buildings must be non-combustible, did not turn their mind to whether the specified external wall cladding was non-combustible, or did not know that ACP or EPS was combustible. Whilst there may have been confusion about the inter-relationship between AS1530.1 (test for combustibility) and AS1530.3 (fire performance requirements), CSV observes⁶ that the tests have ‘materially different’ applications and professionals should not have mistaken test results for different applications in the BCA with the requirements for combustibility. CSV is also dismissive of any suggestion that architects and draftspersons are entitled to rely on other professionals regarding compliance issues.⁷

Key findings⁸ and conclusions of CSV in relation to each of the professional types include:

Reform opportunities

In addition to additional education, CSV made the following reform recommendations to government:

• legislating the duties of ‘industry participants’ who have a material impact on building outcomes to ensure they are accountable for safety, quality and professionalism
• requiring architects, draftspersons and engineers to certify their designs are complete and comply with the BCA
• a chain of responsibility regime should be introduced applying to all relevant persons involved (developers, designers, product manufacturers and distributors, builders) to ensure buildings are safe and meet the requirements of the BCA
• designs for construction should be required to specify the proposed compliance pathway for key building elements
• when faced with inadequate design, the circumstances when builders should stop work and seek professional design input should be codified, and
• occupancy permits should confirm that completed building work complies with the approved building permit.

Key takeaways

The CSV Report presents a narrow-focussed analysis on the role professionals played in the cladding crisis. It is noteworthy that the recommendations of CSV, which was established by the Victorian Government, are consistent with the recommendations of the Expert Panel on Building Reforms set out in its Stage 2 report released in 2023. The Expert Panel was also appointed by the Victorian Government. Many of CSV’s recommendations reflect the reforms which have been made in NSW, pursuant to the Building Practitioners Act 2020 (NSW).

Pursuant to s 137F of the Building Act 1993, when CSV pays an amount to an owner of a building by way of a grant of financial assistance in relation to cladding rectification work on a building, the Crown is subrogated to all the rights and remedies of the payee against any person in relation to the installation or use of any non-compliant or non-conforming external wall cladding product that required the cladding rectification work to be undertaken.

With part of CSV’s focus being on recovery of funds on behalf of the State through the State’s rights of subrogation under the Building Act 1993, there is a question as to whether CSV is sufficiently independent to investigate the factors which contributed to, and caused the widespread installation of, non-compliant cladding on buildings in Victoria. The negligence of professional consultants involved in the design process may be one contributing factor, but there were many others.

It would be in the interests of all stakeholders for an independent investigation to be carried out into the role that regulators, product manufacturers, the Australian Building Codes Board, developers, contractors and professional consultants each had in contributing to the widespread use of non-compliant cladding, with a view to introducing reforms aimed at avoiding a similar crisis in the future.

^[1] See part 2.3 of the CSV Report.
^[2] See part 4.1.
^[3] See parts 2.3 and 3.2.
^[4] See part 4.3.
^[5] As informed by the application professional regulations. CSV did not have the benefit of consultancy agreements for the professionals in the various projects it examined.
^[6] See part 5.1.
^[7] See part 5.1.
^[8] See part 5.2.
^[9] See part 5.2.