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Class action lawsuits launched over flammable ACM panels - Andy McCourt

Class actions against Alucobond supplier Halifax Vogel Group (HVG) and its manufacturer 3A Composites and also Fairview Architectural have been instigated by legal firm IMF Bentham and William Roberts Lawyers on behalf of apartment owners in Sydney buildings. Wide Format Online publisher Andy McCourt has this report.

3A ACM fire comparison
 3A Composite’s own comparison of PE-vs Mineral cored ACM panels in the event of fire

These are the first combustible cladding class actions in Australia. The class actions claim that the cladding does not meet standards applicable to consumer protection laws, and that 3A Composites, Halifax Vogel Group and now Fairview Architectural should pay for it to be replaced, as well as compensation for expenses such as higher insurance premiums and maintenance.

The Fairview class action relates to units in the Solis Apartments tower in western Sydney, while the HVG/3A Composites one relates to a Dolls Point complex. The latest action alleges that Fairview Architectural’s polyethylene-core ‘Vitrabond’ panels do not comply with consumer protection standards. It makes similar arguments to one already launched and defended against HVG, and 3A Composites GmbH of Germany, manufacturers of Alucobond PE.

The class action litigants argue that the polyethylene-core panels, used extensively in the sign industry, failed to meet standards set by consumer protection laws and carried a "material risk" of causing or spreading fire, and increasing the risks to life or property. 

While Victorian class action following the Lacrosse building fire sought to hold the builders, contractors and assessors accountable under the building codes, this is the first time the manufacturer and importer of ACM has been cited. "What we allege is that the product was unsafe, and not fit for purpose," said IMF Bentham investment manager Gavin Beardsell.  

"No doubt within that, the argument is about whether at the relevant time the product in question complied with the Building Code of Australia, but that is not the ultimate issue we have to prove," said Beardsell.

By using the argument that the ACM materials fitted were not ‘fit for purpose’ or of ‘merchantable quality’ – these two class actions sidestep the need make claims under the various Federal and State Building Codes.

The implications could be enormous, and it seems a lot of finger-pointing is already going on, with at least one building contractor declaring insolvency rather than facing paying huge remediation and compensation costs, in the Victorian Lacrosse case.

3A Composite’s Alucobond range does include proven fire-resistant mineral cored ACM and its own safety data compares the effects of PE-vs-Mineral core ACM in a fire. However, it appears the cheaper, PE-core material found its way onto the exterior of a building and early argument by HVG in Court tends to claim that a legally-manufactured product, improperly deployed (by building contractors), can not be held responsible, any more than a poorly mortared brick falling off a building and hitting someone can be the fault of the brick-maker.

The class-actions are on-going and will no doubt increase as apartment owners, and not the building companies, are held responsible for remediation works ordered by Councils. These costs are estimated as between 50 and $100,000 per strata apartment and millions for each building complex. Meanwhile, the values of apartments in combustible ACM-clad buildings are plummeting, if they can be sold at all.

- Andy McCourt

With acknowledgement and thanks to the AFR’s Michael Bleby for parts of this story.