Who is responsible when
wall cladding catches fire? The Lacrosse apartments decision
The fire began in an ashtray on the balcony of apartment
805. It travelled rapidly up the external wall cladding. It
took only 11 minutes to climb from level 8 to reach the roof
above level 21 of the Lacrosse apartments at 673-675 La
Trobe Street, Docklands at 2:35 am on 25 November 2014.
Fortunately, all 400 occupants were evacuated safely, and
there was no loss of life.
The cladding was highly flammable because it had a
polyethylene core, described as equivalent to diesel fuel
sandwiched between two paper thin sheets of aluminium.
The Owners Corporations and the Apartment Owners commenced
legal proceedings in 2016 to recover damages not only for
the fire damage but to replace all of the undamaged external
cladding on the building.
After 22 days of hearings, Judge Woodward handed down a
comprehensive 227 page decision in which he found the
builder, the architect, the quantity surveyor and the fire
engineer responsible to pay damages of $5.748 million (so
The decision is Owners Corporation No.1 of PS613436T v LU
Simon Builders Pty Ltd (Building and Property) 
VCAT 286 (28 February 2019).
How did the fire start and
cause the damage?
At about midnight on 24 November 2014, Jean-Francois Gubitta
returned home from work. He was on a working holiday from
France. He shared the 2 bedroom apartment (805) with 6
others. He dropped his backpack on his bed. He went out to
the balcony to check if his clothes were dry and to smoke.
He stubbed out his cigarette butt in a plastic food
container that was used as an ashtray and went inside to
According to the expert reports, the incompletely
extinguished cigarette butt came into contact with some
organic seeds wrapped in aluminium foil, which set the
plastic container alight, then a wire washing basket half
full of clothing alight, both resting on a timber table on
the balcony. The table began to burn and the flames spread
to a folded blanket on top of the air conditioning unit. The
direct flame exceeded 450°C which degraded the aluminium
skin of the aluminium composite panels affixed as cladding
to the building, setting the polyethylene core alight. The
panels on the building wall provided a vertical fuel load
for the fire to travel up to the roof.
The Tribunal found that the ignition of the fire, its rapid
spread and the damage were caused by:
- the failure by Mr Gubitta to fully extinguish his
- the installation of Aluminium Composite Panels with
a 100% polyethylene core on the external walls of the
The Tribunal found that the table, chairs and other items
‘stored’ on the balcony did not contribute to the fire
Who was responsible and why
The Owners Corporations and the 209 owners of the individual
apartments sued the builder for damages. The builder joined
its consultants - the building surveyor, the architect and
the fire engineer to indemnify it under their Consultant
Agreements for any damages payable. This is a summary of the
The builder – LU Simon
The builder entered into a Design and Construct Contract
with the developer in 2010.
Warranties of suitability of materials, compliance with the
law and fitness for purpose were implied into the contract
by s 8(b), (c) and (f) of the Domestic Building Contracts
Act 1995 (Vic). The warranties are ‘absolute’ – they
apply even if reasonable care is demonstrated. They run with
the building, enabling the owners to proceed against LU
Simon for breach.
Once the unsuitability of the panels was established, LU
Simon was liable for breach of the warranties. It was
primarily liable to pay damages to the owners for all
LU Simon was not negligent (in addition to the breach of
warranties) because it was not aware of the fire risks, and
it had acted as a reasonably competent builder would act,
engaging professional consultants to rely upon.
The building surveyor – Gardner Group
The building surveyor (in NSW & Qld called a building
certifier) entered into a Consultant Agreement with LU Simon
in 2010. It failed to exercise reasonable care in carrying
out the agreement by:
- Issuing a Building Permit for Stage 7 of the
construction of the Lacrosse tower, approving the use of
an ‘Alucobond Specification’ cladding, which did not
comply with the Fire Resistance specifications in
Section C of the Building Code of Australia (BCA) in
2011, which specifies that external walls must be
- Failing to query the incomplete description of the
cladding systems in the fifth iteration of the Fire
Engineering Report prepared by the Fire Engineer.
The Tribunal also found that the Building Permit was
misleading and deceptive in contravention of the Australian
The architect – Elenberg Fraser
The architect entered into a Consultant Agreement with LU
Simon in 2010. It failed to exercise reasonable care in
carrying out the agreement by:
- Failing to remedy the defects in its design of the
tower to make it compliant with the BCA; and
- Failing to ensure that the aluminium composite panel
sample it was given was compliant with the BCA – the
sample was an Alucobest panel, made in Shanghai, with a
100% polyurethane core.
It could not escape liability by arguing that the builder
had taken on its role because it had been appointed head
design consultant under the Consultant Agreement.
The fire engineer – Thomas Nicolas
The fire engineer entered into a Consultant Agreement with
LU Simon in 2010. It failed to exercise reasonable care in
carrying out the agreement by:
- Failing to conduct a full engineering assessment of
the tower to the level required by the International
Fire Engineering Guidelines and to include it in the
fifth Fire Engineering Report – this led to the deletion
of sprinklers on balconies without an alternative
- Failing to recognise that the panels proposed did
not comply with the fire-resisting construction
specifications of the BCA (on a deemed to satisfy basis)
and failing to warn the builder and the other
professional consultants of that fact, and failure to
advise about a solution.
The Tribunal also found that the fifth Fire Engineering
Report was misleading and deceptive in contravention of the
Australian Consumer Law.
The damages payable
The Tribunal ordered LU Simon to pay a total of
$5,748,233.28 to the Owners, including:
- $4,851,937.19 for reinstatement works
- $701,270.16 for additional insurance premiums
(because of the fire)
The Tribunal ordered that the professional consultants pay
LU Simon that amount, in these proportions:
- Gardner Group (the building surveyor): 33%
- Elenberg Fraser (the architect): 25%
- Thomas Nicolas (the fire engineer): 39%
- The remaining 3% was Mr Gubitta’s proportion (for
damage to the balcony), which LU Simon was to bear.
Further sums totalling $6,823,165.65 for compliance costs
(removal and replacement of the unburnt cladding), loss of
rent and alternative accommodation claims are yet to be
resolved in terms of amounts payable.
Does this decision apply to
other buildings clad with aluminium composite panels?
Fire Brigades estimate there are 10,000 buildings in the
eastern states of Australia with suspected highly flammable
cladding. This decision is the first on the legal
consequences, which makes it highly significant.
Judge Woodward has sought to ‘hose down’ its value as a
precedent, by saying:
Given the widespread interest in many of the issues …
these reasons should not be read as a commentary
generally on the safety or otherwise of Aluminium
Composite Panels and their uses. … on the Lacrosse
tower, [there was] large scale contiguous installation
of panels with a 100% polyethylene core on the external
walls of a high rise building, including on
unsprinklered balconies … in close contact with
potential ignition sources such as smouldering
cigarettes, barbeques, items carelessly stored on
airconditioner compressor units, and the like.
Judge Woodward’s decision will almost certainly be appealed,
given that the builder and the consultants were held
responsible to fully compensate the owners.
What should apartment owners in buildings with flammable
They cannot count on the State Governments to assist them to
recover the cost of removing and replacing the non-compliant
As a practical matter, the decision gives the green light
to owners corporations and owners to recover compensation if
their panels were non-compliant with the code (the BCA) and
they make their claim within 6 years of the Certificate of
Occupancy / Certificate of Final Inspection (Domestic
Building Contracts Act 1995 (Vic)).