Docklands owners sue for $24m over fire, as date to fix cladding looms

Owners of a Docklands high-rise gutted by fire have just two weeks before they must start to remove their block's flammable cladding, despite being entangled in an ongoing tribunal battle over the $24 million removal and repair costs.

The fire at the Lacrosse tower in 2014 sent shockwaves through the nation's construction industry, sparking major concerns over aluminium cladding used over four decades on thousands of Australian buildings.

Apartment owners are now suing the builder and other consultants to cover the costs. The result of the case could set a precedent for at least 100 other Victorian buildings, where residents may be left liable for cladding removal.

Lacrosse building's 2014 fire was exacerbated by its flammable cladding.

Photo: Scott Barbour

No one was injured in the Docklands fire in November 2014. But concerns over cladding escalated dramatically in the wake of London’s deadly Grenfell fire – fuelled by the same flammable aluminium cladding – in which 72 people died.

The Lacrosse building in Docklands burns in November 2014.

Photo: Metropolitan Fire Brigade

In Melbourne alone, the state government has issued apartment owners with about 100 orders to remove flammable cladding from building exteriors and replace it with suitable material.

These 100 buildings are among almost 1400 around the state identified with cladding issues.

In July, the state government acknowledged the scale of the problem, bringing in new laws allowing owners of apartments with flammable cladding to pay off loans to repair them on their council rates.

While the government has allowed apartment owners this option to pay for developers cladding buildings in the wrong materials, owners in the Docklands building last week began a lengthy hearing in the Victorian Civil and Administrative Tribunal.

Despite the action, Melbourne City Council's municipal surveyor has ordered removal of the flammable cladding the tower is wrapped in to start by September 23.

The owners' corporation at the 21-storey Lacrosse tower is suing eight parties in all, including builder LU Simon, surveyors Galanos and Gardner Group, architect Elenberg Fraser and fire engineers Thomas Nicolas.

Virtually the only party not being sued in the case is the developer, a $2 holding company registered in 2007 by Morrie Schwartz and a member of the Halim family (the group behind the stalled attempt to redevelop the Windsor Hotel).

The six-week tribunal case began last week, with 17 barristers and solicitors at the bar table, and at least as many lawyers for various parties looking on in the public gallery.

London's Grenfell tower, which burned in 2017 killing 72 people, was covered in the same combustible cladding as Lacrosse, and many other Melbourne towers.

Photo: Jeremy Selwyn/Evening Standard

Evidence tendered by builder LU Simon in its defence shows just how widespread combustible aluminium cladding has become on Australian skyscrapers.

In 1998, one statement tendered by LU Simon said, around 100,000 square metres of one brand of the material was sold. Two years later sales of that brand alone had risen by 50 per cent, and by 2008 there was half a million square metres of the cladding sold.

Another party being sued, the Gardner group, said in its court filings that the use of combustible aluminium cladding “in the construction industry was prolific and … widely approved for use in all types of construction, including prominent Melbourne landmarks and high-rise buildings”.

Four years after the Docklands fire, the Lacrosse apartments have been repaired – but the entire building remains covered in combustible cladding.

Lawyers for the owners' corporation predict work to replace the building’s cladding will cost $17.1 million, while $6.9 million has already been spent as a result of the 2014 fire.

Also named as respondents in the case are Gyeyoung Kim, the then leaseholder of the level-eight apartment where the fire started, and French backpacker Jean-Francois Gubitta, who was among a group which appeared to be staying at the unit.

At around 1.30am on that November evening, Mr Gubitta had left a cigarette burning in a plastic container that caught fire. The wooden table the container sat on then caught fire.

The flames then spread to the balcony’s southern wall, which was covered in aluminium cladding - which is impervious until heat reaches 660 degrees celsius.

Once it had ignited, the fire spread rapidly upwards on the cladding attached to balconies on the 13 floors above.

While the owners' corporation is blaming a range of contractors for the fault, builder LU Simon is largely blaming  architect Elenberg Fraser and other consultants.

The architects say they are not responsible because they merely designed the building. At fault, they argue, were the builder, fire engineer and surveyor.

The building surveyor, in turn, says that while it was not at fault, if it is found to have in part caused the fire, the occupants of the building must share the blame, because the owners' corporation “failed to conduct any routine inspections to ensure balconies of the Lacrosse apartments were not used for storage”.

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