Apartment owners face millions of dollars in re-cladding bills following landmark ruling

Thousands of apartment owners across Australia who thought they were safe from potentially deadly cladding fires now face millions of dollars in bills to remove and replace timber-based panels.

In a landmark legal ruling, timber-PVC cladding that was believed to be a reliable alternative to dangerous aluminium composite has now also been declared unsafe.

This puts the widely-used Biowood panelling into the same category of major defects of the kind that caused the catastrophic 2017 blaze at London’s Grenfell Tower in which 72 people died, and the Lacrosse building in Melbourne, where this year owners won $5.7 million in damages after a cladding fire in 2014.

“This will affect thousands and thousands more buildings all across Australia,” said Faiyaaz Shafiq of JS Mueller & Co Lawyers who conducted the case at the NSW Civil and Administrative Tribunal.

“We think this is the first ruling in Australia, and possibly in the world, against Biowood, and it will have consequences for so many buildings that used it, thinking of it as a safe and aesthetically pleasing cladding.

“But the tribunal found that it is not safe and, if ignited, a fire could spread from apartment to apartment on the exteriors of the façade and then flow inside the building to put residents at risk. It could cause another catastrophe like Grenfell or Lacrosse.”

The case was brought by the owners corporation of four multi-storey towers in Sydney’s Ryde, neighbouring blocks at the new complex The Gardens at Putney Hill by developer Frasers Property, and built by Taylor Construction. The cladding runs up and down the building, and between floors.

“They’re well-built and well-designed buildings, but we obviously became very concerned about the cladding problem,” said chair of the owners corporation Lindsay Spencer. “It’s the way the cladding was used that has created the hazard and means any fire could spread up and across the building, and send the whole towers up in flames.

“As we know, there have been disasters around the world, and this ruling will be useful too for other buildings in the same situation. It’s a hazard people need to know about as, in some cases, if something goes wrong, it could be a life and death situation.”

Owners commissioned reports from fire engineers who testified that the Biowood cladding was combustible and could lead to a fire spreading quickly over, and through, a building. Both the developer and builder argued that, while the material was combustible, it didn’t have the potential to spread.

They refused to replace the cladding, so owners took them to NCAT before warranties expired, claiming they’d breached the statutory warranties of the Home Building Act by using defective materials.

Senior member Philip Boyce found for the owners, ruling that: “there is an undue risk of fire spread via the Biowood extending up the facade of the building which would allow fire spread into the building … The Tribunal is satisfied that Biowood constitutes an undue risk.”

He has now ordered Taylor Constructions and Frasers Putney Pty Ltd to remove the Biowood attached on the facades and replace it with material that complies with the codes, standards and statutory warranties. He also ruled the two companies must pay the owners’ costs of the proceedings.

Owners of apartments in buildings out of the six-year claims period, however, won’t be able to sue developers and builders for defects; they will be compelled to undertake the replacement at their own cost.

“But in the Ryde buildings, the panels will be removed to ensure lives are not in danger,” said Mr Shafiq. “Everyone up until now has been focussing on aluminium composite panels, but now we know a lot more buildings are in danger.”

A spokesperson from Frasers Property Australia said, “We acknowledge the ruling and will work with the construction contractor in the interest of our customers.” Taylor Constructions didn’t return Domain‘s calls.

The wood-plastic composite Biowood – made up of 70 per cent reconstituted timber and 23 per cent PVC – has been used for cladding on both Ryde buildings, which were completed at 3 and 5 Lardelli Drive in 2016.

Biowood is supplied by Biowood Australia and commonly used throughout the country for wall panelling, decking, flooring, fencing, sun-shading and screening. Biowood Australia CEO Melvin Fontanilla didn’t return Domain’s call.

In NSW, 1422 buildings were identified as likely containing dangerous combustible cladding, but this case will make totals in every state and territory much higher.