Lacrosse Fire Appeal Decision - Implications For Consultants

Background

On 24 November 2014, a resident, who lived in the 21 storey Lacrosse Apartments in Docklands, left his cigarette burning in a plastic food container on the balcony. Fire quickly travelled up the external walls of the apartment building and everyone within the apartment building was evacuated. The fire resulted more than $12million dollars of damage.

The VCAT Decision

VCAT at first instance held that the various consultants involved in the development, namely the building surveyor, architect and fire engineer breached their respective consultancy agreements with LU Simon by failing to exercise due care and skill in the provision of their services.

VCAT found that LU Simon, while being 100% liable for the Owners’ damages claims, had relied on the negligent advice of its consultants.  Accordingly, VCAT held that LU Simon was able to pass its liability down to the consultants, with that liability being apportioned amongst them.

The Court of Appeal Decision

The consultants sought leave to appeal VCAT’s decision which was refused. The apportionment of liability was maintained in accordance with VCAT’s decision, namely the fire engineer at 39%, the building surveyor at 33% and the architect at 25%. 

Combustible Cladding

The Court of Appeal confirmed that the Building Code of Australia (BCA) did not permit the use of combustible cladding in the manner that it had been used in the Lacrosse Apartments for a Type A construction. The building surveyor failed to persuade the Court that the cladding installed on the façade of the building met the deemed to satisfy provisions contained under clause 1.12(f) of the BCA.

Peer Professional Opinion Defence

At VCAT, the building surveyor relied upon the peer professional opinion defence contained within section 59 of the Wrongs Act 1958, namely that in certifying the cladding for use in an apartment building, he simply adopted a practice that is widely accepted by his peers.

The Court of Appeal rejected this submission and held that the practice of approving and certifying the use of cladding in these circumstances was unreasonable.

Implications for Consultants

Consultants are more likely to be held liable for cladding related defects. Consultants will likely be expected to prepare reports to demonstrate that the material utilised in a development complies with the BCA.

Insurance

Consultants may be unlikely to secure insurance cover for cladding-related projects. Further, there is likely going to be an increase in professional indemnity insurance claims for cladding defects. 

To learn more about the decision, or if you require legal assistance, please contact Chris Moshidis, Director and Principal Lawyer on +61 9521 7956 or chris@urbanlawyers.com.au