In Part 1, we explained the liability findings in the judgment on the Lacrosse building fire delivered on 28 February 2019. This Part 2 looks at some more detailed aspects.
Does it matter that the Builder substituted an alternative cladding (Alucobest) in place of the originally specified product (Alucobond)?
Not in this case. The court finds there is no evidence that Alucobond would have performed any differently from Alucobest, since both products were composed of an aluminium layer around a combustible polyethylene core.
Although some Alucobond models had better fire resistance, none of them met the BCA requirement to be non-combustible. In any case, the T2 Specification did not call for these superior models, but merely specified a material “indicative to” Alucobond. Since the material specified by the Architect (and approved by the Building Surveyor and Fire Engineer) was combustible anyway, the Builder’s substitution did not cause the fire.
If the original specified product had been non-combustible and compliant, and the Architect’s scope of services had stated that approval of substitutions was for aesthetic or visual purposes only, then the substitution could have rendered the Builder liable.
What does it mean when a consultant approves a substitution?
In May 2011, the Builder sent a sample of its proposed cladding, Alucobest, to the Architect, who replied the same day that the colour was acceptable and asking the Builder to confirm that the panel met the warranty and other requirements of the specification. The Builder contacted the manufacturer and then confirmed to the Architect that the product’s warranty was “15 years in accordance with the specs and Head Contract”, following which the Architect signed the Builder’s sample submission form and indicated the sample was approved. No further discussion is mentioned about compliance with the specifications or BCA, or in particular combustibility.
The court rejects the Architect’s claim that its approval role was limited to “aesthetic selection of materials”, as there was no record of their role being so limited. Looking back to the Architect’s scope of services made it clear their role was “considerably more expansive than visual intent alone”.
By contrast, the project manager’s role as Superintendent stated: “Samples will be reviewed for their visual characteristics only”, with the result that the Project Manager was held not liable.
|Lesson: If your role in approving substitutions is limited to visual or aesthetic qualities, you must say so clearly and unequivocally in your consultancy agreement/scope of services, and it helps to also reinforce this consistently in specifications and approval documentation. Otherwise, assume your role extends to quality and compliance also, and fulfil this role diligently.|
Deletion of sprinklers from balconies
The Fire Engineer was found not liable for approving the deletion of sprinklers from balconies. There was an argument that this deletion was an alternative solution, and in that case it was clearly non-compliant as there were no records to support it. However, for reasons that are not detailed in the judgment, the Fire Engineer convinces the court that deletion of the sprinklers was allowable under AS 2118.1, and was on the basis of a deemed to satisfy pathway, meaning no alternative solution was required.
Related to this, however, the court finds that the deletion of the sprinklers was on the basis that the balconies would comprise non-combustible construction, which clearly they didn’t because of the ACP cladding. As explained in Part 1 of this article, the court does find the Fire Engineer liable for failure to assess and advise on the use of combustible ACPs on the balcony walls.
|Lesson: In light of Lacrosse and subsequent fires, and changes in the NCC 2019, sprinklers should be included on balconies of buildings requiring Type A construction with a rise in storeys of 4 or more. Note also that sprinklers are a requirement for using verification method CV3 which incorporates AS 5113:2016.|
What difference does novation make to a consultant’s role?
In the witness box, the Architect described a post-novation scenario where the Builder was in control, saying:
- “once the builder was in charge, the builder was really taking on the role of lead coordinator, dealing with the consultants”
- The Builder insisted on using its own signoff forms for materials samples, instead of the Architect’s system
- The Builder “sidelined” the Architect from fulfilling its role.
While this may well be a scenario which many consultants will recognise from their most challenging novated projects, there was no evidence in minutes, emails or other correspondence that the Architect raised concerns about this during the project. And, as explained in Part 1 of this article, the primary document for defining the Architect’s duties was the consultancy agreement/scope of services, which did not state that the Architect had a limited post-novation role.
|Lesson: Courts may not assume that novation means a more limited role and liability for consultants. Assume your role is the same as on a traditional procurement. If you say your role is more limited, document that clearly in your consultancy agreement/scope of services. If your role reduces or changes afterwards, document that change (communicating it clearly to your client the builder) and, if the change jeopardises the project, keep a clear written record of having raised concerns.|
What does it mean to be “Head Design Consultant”?
The Architect’s scope of services said “The Architect is Head Design Consultant and is responsible for coordination of all design issues into the final design”. Although not determinative of liability all by itself, this fact did increase the court’s expectations of the Architects’ role and responsibility.
The judgment finds the Architect “abdicated” its head design responsibility by failing to ensure that its design intent for the T2 Specification was translated into the constructed building, and breached its head design obligations by approving the substitution of Alucobest without investigating its BCA compliance.
|Lesson: Titles like “head design consultant” are not to be used lightly. When used, they should come with a clear scope of services, and perhaps attract a higher fee.|
Tips for specifications
The T2 Specification is full of attempts to transfer design responsibility to the Builder, and the court ignores each and every one of them. Examples include:
- “The design responsibility rests with the Contractor who will be responsible for completing the Design Documents, meeting any specified performance criteria and executing the work under the Contract.”
- “B. Contractor’s Responsibility:…
- Be responsible for the final selection of products and associated components, which shall be used solely for the purpose intended by the manufacturer and will satisfy the requirements of the Contract.”
A specification cannot over-ride the obligations of the consultant under their consultancy agreement/scope of services. Trying to use specifications for this purpose is doomed to failure. At most, specifications can reinforce roles that are already set out in the consultancy agreement/scope of services. And of course they can always fulfil their primary purpose, which is to define what the builder must build.
|Lesson: Provisions purporting to shift design responsibility are probably doomed to fail if included solely in the specifications. To be effective, they need to be in the consultancy agreement/scope of services and (if the builder is not a party to that) also in the construction contract.|
Human memory and the power of written records
The employee of the Architect who approved the Alucobest substitution said he had no recollection of the actual events, and was working solely off the documents. Although the court found the Building Surveyor to be “an honest witness”, some of his evidence was about his “usual practice” rather than things he had a specific recollection of doing on this project. This is a typical weakness in professional witnesses, and the court hits that nail on the head with this passage:
- “It is understandable that a person in that position, who lacks both contemporaneous notes and a clear memory, would persuade themselves over time of the truth of a narrative that was consistent with their view of what they believe they ‘would have done’ as an experienced and competent practitioner.”
While accepting that the Building Surveyor “genuinely believed” its version of events, the court finds that it simply was not accurate.
|Lesson: The most credible witnesses have a clear memory of relevant events and contemporaneous notes. Without those things, professional witnesses tend to reconstruct what probably happened, according to what they usually did, and courts do not find this very persuasive.|
Another interesting piece of evidence was an Alucobond brochure dating from about 2009, which featured pictures of high-rise buildings and said “The non-combustible aluminium cover sheets protect the PE core”. This could have been a critical piece of evidence against the manufacturer, if Alucobond had ended up being used on the building.
The key lesson for consultants is that it is extremely difficult to effectively abrogate your legal responsibility for compliance with the BCA, even when you think your role is a limited one. If performing a limited role, nothing is more important than articulating those limits clearly and unequivocally in your consultancy agreement, and not using a “standard” scope of services that describes services you will not actually provide.
However, this judgment makes it clear that consultants are still at great risk of liability for defects, even if they believe they are performing a limited role.
The most failsafe solution is always to play a strong role in construction phase, and prevent poor and non-compliant substitutions, so as to avoid being caught up in cases like Lacrosse at all.
If standards in the construction industry are to improve, clients and builders will have to pay for this higher level of service, and plan for higher consultant fees. Clients who pursue discounted fees in the belief that consultants’ roles somehow require less work than in the past, or that some of the design work has been taken on by project managers or design-and-construct builders, should revise that view. On this project at least, the consultants were held liable to perform almost the same broad scope of services as on a traditional procurement. With a comparatively low architectural fee reported in the judgment, that’s a scope for which they had arguably not been properly paid.
And if that’s not enough, come along to our webinar about the Lacrosse judgment on 11 April and get a different perspective from one of the solicitors who worked on the trial. (Discounts available for Planned Cover clients and some association members – contact us for details.)