Secret fire-safety deals

16:00, Feb 08 2014

The systemic failure by cost-cutting apartment developers to build fire-safe apartment blocks in New Zealand's major city is being kept under wraps by secret legal settlements.

The Sunday Star-Times has learned of a number of secret settlements to homeowners involving professional fire engineers and the Auckland Council for sub-standard fire systems in multi-unit dwellings although the council denies its involvement.

While the fire safety problems are not restricted to Auckland or apartment buildings, the Star-Times understands settlements so far have related to Auckland apartment complexes.

The fire engineers are on the hook if they have certified systems that don't meet the required building consent conditions while the building consent authority is legally liable under the Building Act to ensure the consent documents accurately reflect the work carried out before issuing a code compliance certificate.

The leaky building crisis has been well publicised. But lawyers for leaky building claimants say around one in five claims for defective and shoddily-constructed apartment blocks also involve claims to fix faulty and sub-standard fire systems.

Leaky building litigator Paul Grimshaw's firm currently represents about 6000 clients with leaky properties; the majority are body corporates for apartment blocks in Auckland.


He says the problems with apartment buildings would be better described as construction defects rather than weathertightness issues.

"Leaking doesn't really cover it . . . There are fire issues, there are structural issues, there are cladding issues."

He says builders and developers have cut corners by not correctly fire rating buildings.

Inadequate fire rating means a building will burn too quickly, not slowing the spread of fire enough to allow residents to escape, or may cause the building to collapse.

Leaky building lawyer Adina Thorn says she has also seen a number of problems in developments, including walls constructed from the wrong kind of gib board and poor assembly.

"Fire engineering relies on the assembly principle. It's a jigsaw going together. If one part of the jigsaw is not right you have a problem."

Thorn says "we have only scratched the surface" of the fire issues.

"Most of the leaky building cases have fire issues within them. I suspect there are going to be a whole lot of claims, particularly on fire . . . Some of the issues are not obvious to the eye - if the wrong thickness of gib has been used you can't pick that up."

The Sunday Star-Times has learnt of a recent six-figure settlement reached by a large body corporate in downtown Auckland with a fire certification company.

The fire system was found to have had components manufactured locally on the cheap, rather than using more expensive imported, certified components.

Another apartment building in the city had widespread issues with its fire-safety systems, including inadequate fire escapes.

A claim against the Auckland Council and engineers has been filed in the High Court, the Star-Times understands, but secrecy surrounds which buildings are affected.

Grimshaw claims there has been a number of settlements against fire certifiers and engineers and the council, but the confidential deals mean his lips are sealed on details.

Most of the cases never see the courtroom and the fire engineers walk away from the claims without admitting liability and with their reputations intact, he says.

"Effectively the engineer can say I don't have a liability but to stop this proceeding I will pay you x dollars, and I have never had a liability against me."

Thorn is also aware of a seven-figure claim settled on a large apartment building which involved fire defects.

The secret settlements suit apartment owners who fear a drop in the value of their apartments.

But the confidentiality of the payments is keeping the wider industry in the dark, it is claimed.

The Auckland Council says it has not been involved in any claims for buildings not meeting fire standards.

Ian McCormick, council manager build control, says in a written response to questions, that Auckland Council relies on independent qualified persons to notify it of any fire-safety issues which they observe as part of their regular inspections of Auckland's approximately 27,000 apartments.

"We are also reliant on the knowledge and understanding of body corporates and building owners on these matters. If we are notified of any matters of possible non-compliance they are dealt with immediately," he says.

Code of compliance certificates are only issued for buildings which comply with their approved building consent and fire design with appropriate certification documentation from the consultants, he says.

Immediate past president of national industry body Fire Protection Association of New Zealand (FPANZ), Mitchell Brown, says the settlements are news to him.

"If that is the case I would love to know, and the members would love to know where these buildings are and who the companies were . . . If [settlements] are confidential it makes it very difficult to do anything about."

He says FPANZ has a high percentage of the industry as members and represents about 200 companies. They sign up to certain standards and ethics, Brown says.

"If people are questioning the work of members of the FPA that is an issue for the FPA, obviously. We have a process for dealing with that, it is like a complaint."

He says building owners and developers are ultimately responsible for meeting building code requirements and it was unfair to pin the issue on the fire-protection industry.

"You can't expect a contractor to install a better, flasher, more expensive system than the owner wants or is in the tender."

Mike McEnaney, senior fire risk manager in Auckland city, says he has heard of issues with fire safety systems in Auckland apartment buildings. While the buildings are checked annually by professionals to ensure compliance, as required under the Building Act, the system relies on those checks being done correctly, he says.

"It's hard to say how widespread it is. I would get maybe a couple of times a month some sort of a referral."

He says the Fire Service checks any building it receives complaints about.

"If you find systems that aren't working we have the ability to move pretty quickly to get them fixed up. Generally we would refer them to the territorial authority and then they should make them come up to the required standard.

A building can be closed down and shut down and people move out if its serious enough. We have done that in the past and we will do that in the future to make it safe for residents."

While fire safety issues have been identified up to 10 years ago, the issue is not just historic, Grimshaw says.

"It's still going on. Buildings are still being badly built . . . If the council is not very careful they will end up finding another leaky building crisis."

Home Owners and Buyers Association president John Gray says he would hope new buildings have greater scrutiny.

"We are concerned that as the level of building activity begins to rise we are just going to see standards slipping down again. We have no guarantee we won't see these sorts of lapses again."

The Institute of Professional Engineers says under current regulation there is no requirement for fire designs to be prepared by a chartered professional engineer.

"A building consent authority has the discretion to decide whom it accepts a building's fire design from, regardless of whether they are a fire engineer or not."

Gray says there is "no way" he would buy into an apartment building given what he knows.

"We need more stringent controls."

Thorn wants to know what due diligence the Auckland Council carried out in terms of fire engineers.

"What they have relied on in the past hasn't worked."

The council's McCormick says it ensures new apartment builds comply with their building consent and approved fire design.

Any illegal work that is brought to it its attention is dealt with immediately.

Sunday Star Times