LU Simon

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Victoria’s appeal court has ruled that builder LU Simon does not have to pay damages for combustible cladding installed on the Lacrosse tower in Melbourne's Docklands. 

The appeals court made the ruling on Friday following a three day hearing in February by Justices David Beach, Kathryn Stynes and Robert Osborn.

The appeal was undertaken by architecture firm Elenberg Fraser, fire engineering consultancy Thomas Nicolas and building surveyor Gardner Group, who sought to overturn a 2019 judgment that saw them hit with a $12 million damages responsibility for use of polyethylene-core panels on the Melbourne apartment tower.

The matter centred whether LU Simon had responsibility arising from having breached the implied warranty of Victoria’s Domestic Building Contract Act and also the state’s Building Act when its constructed the apartment building that did not comply with the Building Code of Australia.

[smartcode_project:default project_id=2929]

The appeals court ruled the builder was not negligent under separate legislation, the Wrongs Act.

The polyethylene-core panels in the Lacrosse tower saw fire affect 13 levels of the 21-storey building in its November 2014 fire. The fire broke out shortly before 2:23am on 24 November 2014 on the balcony of apartment 805 of the Latrobe Street complex with the source of the ignition being an incompletely extinguished cigarette butt left in a plastic container on a table with a timber top.

The cladding through which the fire spread was constructed with an aluminium composite panel (‘ACP’) known as Alucobest, which contained a polyethylene core. Alucobest ACPs had been installed as the external panel cladding on the eastern and western facades of the building.

The Victorian Court of appeal ruled a builder could rely on consultants’ understanding on things that are technical and outside their knowledge as builders can’t be expected to know the intricacies of products.

"The fact that they (the panels) did not meet the statutory warranties given by LU Simon, because they were not compliant or fit for purpose, does not of itself constitute a lack of reasonable care," the judgement noted.

[smartcode_project:default project_id=3490]

The court judgement noted LU Simon "like so many others in the industry" had been "misinformed" by the material which Alucobond published at that time.

It referenced the Alucobond brochure ‘Alucobond — 40 years of excellence — From a Pioneer to the Synonym’ and similar comforting statements were made in the Alucobest brochure where in addition to reference to various ASTM test results, it is stated that Alucobest has ‘Outstanding characteristics of fireproofing’ next to an image of a flaming match.

It is not known if the consultants, and the insurers funding their cases, will now seek leave to appeal the issue to the High Court.

The risk remains that apartment owners and residents will be left without a meaningful remedy for their costs, Matthew Bell, a senior lecturer at Melbourne Law School, told the Australian Financial Review.

The AFR advised the appeals court judgment did offer hope to apartment owners as the ruling went beyond the Lacrosse-specific findings of the VCAT ruling and said the use of aluminium composite panels on all buildings built around that time contravened the building code.

[smartcode_project:default project_id=600]

The 2019 VCAT ruling had allocated 33 per cent of the liability to Gardner Group, 39 per cent to fire engineer Thomas Nicolas and 25 per cent to Elenberg Fraser. The apartment occupier was found to share a 3% responsibility.

Last month the Victorian state government changed the Building Act to ban dangerous cladding on new multi-storey properties.

Planning Minister Richard Wynne announced a prohibition with non-compliant builders now risking fines of up to $400,000.

The Building Act change was a recommendation in 2019 from the Victorian Cladding Taskforce co-chaired by former premier Ted Baillieu and former deputy premier John Thwaites.

More than 500 buildings were identified by the Victorian Building Authority as being at high risk of a cladding fire. 

The state government committed $600 million to rectify dangerous cladding on hundreds of high-risk buildings.

Apartment sales that stalled in Lacrosse have picked up with eight sales since last November, with the priciest being $582,500.

The 92 sqm two bedroom unit had last sold in December 2014 at $505,000 having first sold off the plan in 2008 at $522,500. 
 
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Victoria’s appeal court ruled that builder LU Simon does not have to pay damages for combustible cladding installed on the Lacrosse tower prior to its June 2012 completion 

jchancellor

Apartment cladding insurance battle to possibly head to High Court

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Developer Growland has appointed LU Simon to build stage one of its mixed-use residential <a href="https://www.urban.com.au/projects/victoria-square-8-hopkins-street-footscray">project Victoria Square</a>, with construction now underway on the first two towers, reinforcing the continued demand for Footscray. 

The $600 million project comprises six residential towers of 937 apartments, in addition to over 5,500 sqm of commercial, retail and hospitality space on Hopkins Street.  The first phase of Victoria Square is expected to be completed by late 2020 and has achieved sales of 90%. <a href="https://www.urban.com.au/news/victoria-squares-next-phase-adds-to-footscrays-development-pipeline">Stage three, titled VS03, has just launched to market and will include a boutique collection of just 86 apartments.</a>

Growland says it’s not surprising Footscray has become a hotspot, particularly for young buyers, with research from District Data indicating that the area is in the early ‘hotspot’ phase, providing buyers an opportunity to take advantage of excellent value for money.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public//pictures/article-images/victoria_square_-_facade_hero_shot_1.jpg" rel="gallery-all" title="The first stage of Victoria Square has commenced construction. Image: Supplied"><img alt="" class="image-article-full-width-580px" height="883" src="/sites/urban.melbourne/files//styles/article_full_width_580px/public/pictures/article-images/victoria_square_-_facade_hero_shot_1.jpg?itok=aIAiSK8i" title="The first stage of Victoria Square has commenced construction. Image: Supplied" width="580"></a>

<figcaption>The first stage of Victoria Square has commenced construction. Image: Supplied</figcaption></figure>According to Growland, the company is proud to be partnering with LU Simon, a builder that it says shares its vision for the project and commitment to the well-being of the residents.LU Simon has had a presence in the Melbourne for over 60 years, across a broad portfolio of projects including eight residential projects across Australia currently at construction.

Victoria Square is just one of a growing number of residential sites commencing in Footscray, with the suburb now one of Melbourne’s most sought-after inner-suburbs for young homebuyers. <a href="https://www.districtdata.com.au/">District Data</a> indicates the proportion of residents aged 20-39 has increased by a substantial seven per cent between 2006 and 2016. These buyers are driving demand for housing and a subsequent shift in the local built environment, with approximately 282 dwellings currently under construction in the area.

The appeal of Footscray as a suburb to buy apartments in is also reflected in it being amongst <a href="https://www.urban.com.au/news/urbans-top-5-for-october-most-viewed-suburbs">the 5 most viewed suburbs on Urban.com.au during October</a>, in fourth place. 

<h2>Footscray's development pipeline</h2>

<iframe frameborder="0" height="420px" src="https://www.urban.com.au/developments/footscray-vic?embeddable=map" width="100%"></iframe>

<h2>What they say...</h2>

<blockquote>
Footscray is an ideal location for young families, working professionals and first and second home buyers. In addition to being just 4km from Melbourne’s CBD, it is a thriving education and employment hub in its own right, which is driving the shift in demographics to younger buyers that want to be close to the action.

The multicultural community offers an impressive variety of hospitality options and a friendly and vibrant atmosphere. It’s incredibly rewarding to be able to play a role in the area’s rejuvenation and to create a communal space where locals can enjoy top-quality restaurants and retail outlets.

- Bruce Chan, Growland Chairman
</blockquote>

 

<blockquote>
Victoria Square is more than a residential project, it’s a large-scale lifestyle precinct that will help shape the fabric of the Footscray area and bring value to the local community. Given the level of design quality and the scale of the development, it is integral that the builder we partner with has a proven track record of delivering similar projects on time, and to budget.

Commencing construction at Victoria Square is an important milestone that we are proud to share with our purchasers and future residents.

- Ronald Chan, Growland CEO
</blockquote>

 

<blockquote>
The median unit price in Footscray is $405,000, which is unheard of for a suburb that is within 5km of the CBD; Flemington, Hawthorn and Windsor are all a similar distance and significantly more expensive. Combine that with a fantastic public transport network, proximity to education and employment and a buzzing café culture, and I have no doubt we will continue to see an increase in demand for apartments in the area.

- Daniel Slomoi, District Data managing director
</blockquote>
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