Mum–There’sAsbestosinmyWeetbixAgain
Why the construction industry makes for bad neighbours and what we can do about it.
Kiri Parr
June 2024
It’s not been a great start to the day. You’ve been listening to the morning news and you are worried that your kids might have eaten some asbestos in the park yesterday - their ice creams carefully extracted from the mulch they had fallen into. And looking at the latest numbers for your hair salon, you can’t survive another 3 months of the construction work out front The dust, noise and hoardings of the light rail project have been outside the shop’s front for months now and revenue is down 25%. Pedestrian traffic has collapsed, and your once attractive and highly visible location feels like a back alley Not to mention the smells that are just overwhelming some days. And you are dreading spending the weekend at your dad’s farm, clearing yet another truckload of construction waste dumped beside the quiet road that backs onto his property The local council just can’t keep ahead of the illegal dumping that has followed the new housing development, especially with no nearby dump for the contractors to use. And to put a cherry on top, you just heard from a long time Uni friend that their partner was killed on his walk to work. A wall collapsed in a heavy gust of wind, killing him instantly.
A simple question was put to me last year. What does community-centred construction work look like? By this, I mean construction work that is undertaken to minimise harm to a project’s neighbours
That question led me to explore the risks borne by neighbours of construction work. What are those risks, who is responsible for managing those risks and what rights do neighbours have should a risk crystallise
What emerges is that harm to neighbours of construction work is a well-known risk but one which quickly moves out of sight and out of mind. The reason for this? The legal system currently leaves much of the burden of these risks on its neighbours and provides limited incentive for the construction industry to better manage these risks
But this is changing. The case studies in this paper have drawn attention to weaknesses in regulatory regimes and led to changes in the law and its application There are industry participants who are stepping up to the plate and making the management of these risks a priority.
The construction industry can be a better neighbour.
Howdoconstructionlawyersunderstandandallocatetheriskofharmto neighbours?
The starting point of this paper is to explore how construction lawyers discuss the risks construction work has on its neighbours
A review of a range of leading textbooks on construction law1 finds that risks to a project’s neighbours is analysed narrowly and often in the context of the delay and costs risks to the project itself.
For example, in Building and Construction Law Australia2 in the chapter on Access and Nature of Possession, Contractors are reminded that adjoining owners have common law and legislative remedies if their land or buildings are jeopardised by construction activities The text also explores the issue of encroachment of works into adjacent spaces, such as by cranes, and who bears the costs of additional works, delay or remediation works
Julian Bailey, in his textbook Construction Law, makes this statement in the context of these risks, making you think that the neighbours’ risks are not worth much contemplation at all:
The common law places few restrictions on the performance of construction work, and the arrangements that a landowner may make to have construction work performed on his land. Broadly speaking, if the work does not unduly affect other landowners or persons in the immediate vicinity, an owner of land may do whatever he pleases when it comes to building on it.
I also checked to see if this risk made it into Max Abrahamson's analysis of construction risk3 in his seminal paper ‘Risk Management’. Alas not.
The industry standard contracts in turn oblige contractors to carry out works in compliance with laws and so as to not unduly affect the neighbours.
AS4000 – 1997, by way of example, provides:
• a general obligation on the Contractor to comply with all laws (clause 11)
• an obligation on Contractor to protect people and property, including to prevent nuisance and unreasonable noise, combined with an obligation on to rectify any damage and pay any compensation required by law (clause 12)
• a general indemnity given to the Owner in respect of personal injury or property damage (clause 15)
1 John Dorter and John Sharkey, ‘Building and Construction Contracts in Australia’ (2007) LawBooks; Phil Loots and Donald Charrett, ‘Contracts for Infrastructure Projects: An International Guide to Application (1st ed.)’ (2022) Informa Law; Jeremy Coggins, Jeremy, ‘Contract Administration for Construction Professionals’ (2021) LexisNexis Butterworths; Britton, Philip , Matthew Bell , Deirdre Ní Fhloinn, Specialist contributors , and Kim Vernau, ‘Contract Law in Residential Construction’ (2021) Oxford: Hart Publishing; Julian Bailey, ‘Construction Law’ (2011) Informa Law from Routledge
2 John Dorter and John Sharkey, ‘Building and Construction Contracts in Australia’ (2007) LawBooks
3 Max Abrahamson, ‘Risk Management’, (1983) International Construction Law Review, 241.
• an obligation on the Contractor to hold public liability insurance (clause 17).
In a similar vein, FIDIC Green Book obliges the Contractor to not interfere unnecessarily or improperly with the convenience of the public (clause 4.1.3) and to comply with all health, safety and environmental laws (clause 5.3).
As a matter of construction law practice, the risk of harm to neighbours is known of but given little further consideration, transferred to the contractor to manage.
What can then be learnt about these risks from actual events?
AWasteDisposalProblem
It's 4:00 on Friday evening and you've got one more load of rubbish to remove from site. But you’ve got to get home, you have tickets to the game and kick off is 7.00pm! You've been working at a new residential development but there is no local tip, and it is a 2 hour round trip to the nearest facilities. You’ll never make it. You are so tempted to just leave the mess on site, but the Council have had their inspectors out. Can’t risk another fine. You’ve seen lots of others dumping loads along the quiet back roads nearby….
Greg James manages an 80-hectare rural property and a dozen Aberdeen Angus cows in the Macedon Ranges. Builders and tradesman have dumped material on his property at least four times in the past 12 months. That rubbish has included washing machines, pipes, old trees, soil, and plaster. Not quite the clean and quiet environment he expected when moving to the country. The local council are issuing infringement notices to builders across the area and the Environment Protection Authority are doing surprise inspections. The local community is calling for more police patrols and the local council have toughened up their local bylaw and are referring worksites to WorkSafe Victoria for further investigation.4
Meanwhile asbestos contaminated mulch has been found in public parks across Victoria and New South Wales. The source of the asbestos is contaminated construction waste making its way into the mulch production supply chain, including due to illegal dumping.5 The issue isn’t going away, if anything it will increase as we endeavour to reuse more and more construction waste.
News articles reporting on the recent asbestos mulch contamination identify how the checks and balances put in place to manage contamination risks are not fool proof. For example, green and timber waste that goes into mulch products relies extensively on
4 ABC Central Victoria/Shannon Schubert, ‘Tradies dumping rubbish on farmland, builders fined for dirty work in the booming town of Gisborne’ (13 May 2024)
5 Adeshola Ore, ‘EPA issues warning to councils after asbestos found in Melbourne parks’ (8 April 2024) The Guardian.
humans to visually spot asbestos and other contaminants as loads are tipped out.6 Questions have also been raised as to the robustness of sampling and testing regimes.7
If you were like Mr James in the story above and rubbish was dumped on your property, you could report the illegal dumping on your property to the Victorian Environmental Protection Authority (EPA) They have an anonymous hotline in case you are concerned about retribution from those who are doing the dumping The EPA can then carry out investigations into those breaches, including testing, securing sites, collecting evidence and ultimately imposing fines and penalties if they can identify the culprits 8 The regulators costs are borne by us all. In the meantime, I suspect time and money is spent by Mr James, with heavy gloves on, picking up that rubbish.
The risk of wrongful and illegal waste disposal from construction work is falling on project neighbours, directly and indirectly. The prevention and management of this risk is very dependent on how effective the applicable relevant regulatory regime and regulators are
FailuresofMasonryStructures9
It's almost 3:00pm on 28 March 2013, Easter Thursday. Alex ,19, is walking along Swanston Street. He is studying for a Bachelor of Arts at Melbourne University. He is planning to go on to study law.
He is walking with his younger sister, Bridget Bridget is 18 and studying a Bachelor of Arts at university. She is planning to become a teacher.
They are off to meet their father to watch an AFL match.
There is a strong gust of wind. The wall they are walking alongside collapses.
6 7.30 By Emily Baker and Emily Jane Smith, ‘Testing for asbestos in mulch relies almost solely on the humble huma eye’ (20 February 2024)
7 ABC News, ‘Mulch containing asbestos has been identified in at least 22 sites in NSW – how is this happening?’ (14 February 2024).
8 Reference was made to epa.vic.gov.au for details on their powers and processes following the reporting of illegal dumping.
9 The details discussed in this section of the paper are taken from the following Coroner Findings: Finding into the Death of Marie-Faith Chantal Abla Fiawoo (Coroners Court of Victoria, State Coroner Judge Sara Hinchey) COR 2013 1339; Finding into the Death of Alexander David Jones (Coroners Court of Victoria, State Coroner Judge Sara Hinchey) COR 2013 1338 and Finding into the Death of Bridget Louise Jones (Coroners Court of Victoria, State Coroner Judge Sara Hinchey) COR 2013 1368
Alex and Bridget die. Also killed is a French research fellow living in Australia, Dr Marie- Faith Fiawoo. She had plans to go on a 13-day hiking trip to New Zealand that very Easter weekend.
The wall that collapsed was part of a potential development site owned by a subsidiary of Grocon, Grocon (Victoria Steet) Developments Pty Ltd (Grocon Victoria) An employee of Grocon Victoria had arranged for signage to be put up on that wall 18 months beforehand The sign was 30 metres long and around 3 metres high. The signage contract was awarded to a company called Aussie Signs Aussie Signs in turn subcontracted the work to JT Hire Pty Ltd, who then subcontracted the work to Paramount Signs Pty Ltd.
This event was a tragedy and might be at first glance thought of as a rare or freak accident But failure of masonry structures is a well-established construction risk with wellestablished controls
How did those controls fail in this case?
The first control was the onus on the property owner to maintain the safety of buildings and structure on its premises. In this case, Grocon Victoria had undertaken no structural assessment of the wall. This was despite it undertaking a range of other work on the site, including rubbish clearing and soil testing It was also part of a company that had a construction arm, with access to the skills and resources to appreciate and manage such risks Grocon’s submission in subsequent prosecutions was that ‘the systems which normally applied when Grocon was engaged in undertaking construction works were not implemented at the site because, at the time, there was no construction work being undertaken. The marketing and other arrangements relating to the site at this preconstruction stage were being dealt with by the Grocon (Victoria Street) development team ’10 Grocon subsequently changed its management processes for development sites.
The next control was the requirement to obtain a building permit before carrying out the building work Obtaining that permit would have needed engineering drawings and calculations to confirm that the existing masonry wall could support the signage. In this case, the owner had not obtained a building permit and the contractor had not enquired whether the owner had obtained a building permit or not
No charge for this breach was laid against Grocon Victoria because at the time it was not an offence for an Owner to permit building work to be carried out on its land without a building permit. That law has since changed. The sub-sub-subcontractor was fined $7,500, with costs of $26,374, for breach of the Building Act, specifically for carrying out work without a building permit
10 Finding into the Death of Bridget Louise Jones (Coroners Court of Victoria, State Coroner Judge Sara Hinchey) COR 2013 1368 at para 46(b)
An argument was also raised that a WorkSafe inspection, carried out during the signage works, should have extended to checking that there was a building permit in place. If that check was done, the deficiency would have been found and the works would have been stopped. However, the Coroner did not accept this argument. The regulatory purpose of the inspection was to check that work was done safely, and no more.
The final control is the obligation to carry out work safely under the Occupation Health and Safety Act 2004 (Vic).
This obligation was clearly not met and there were financial consequences for this breach. Grocon Victoria pled guilty and was fined $250,000 under the Occupation Health and Safety Act 2004 (Vic) for not making sure that its subcontractor had checked to make sure it was safe to affix the sign to the wall Additionally, Grocon managed its reputational damage well and was found to have acted by the court as a good corporate citizen post the event. The subcontractor, Aussie Signs, was convicted and fined $250,000 for its failures
What compensation was available for the families of Alex and Bridget? They pursued compensation against Grocon under the Sentencing Act 1991 (Vic) for their pain and suffering and medical expenses This more limited course was pursued over the Wrongs Act 1958 (Vic) because it did not require negligence to be established, a high bar that makes recovery difficult. That claim was settled confidentially. As was noted by lawyers commenting on the case, Australian law does not recognise claims for wrongful death and that the elements that must be established to recover under the Wrongs Act can be difficult to establish.11
When construction work is not carried out safely, the damage, whether in the form of property damage or personal injury or death, can fall on that project’s neighbours. The neighbours largely carry this risk but are dependent on the owners and contractors effectively managing this risk
BeyondReasonable12
It is 2012 and the CEO of Hunt Leather is very happy with how their retail store on George Street is going.
Down the road at the headquarters of Transport for NSW (TfNSW) plans are afoot to build a light rail from Randwick to Circular Quay – a large game changing endeavour for the city of
11 Redlich Work Injury Lawyers, ‘Wall Collapse: compensation under the Sentencing Act’ (13 June 2016)
12 The detailed in this section are s taken from the judgment handed down in Hunt Leather Pty Ltd v Transport for NSW [2023] NSWSC 840
Sydney. A public and private partnership (PPP) is entered into between TfNSW and a Connecting Sydney (CSY) to deliver the project.
Everybody involved knows that the construction of the SLR is going to disrupt the city of Sydney. Stage 1 of the Gold Coast Light Rail project had experienced 15% of businesses along that route fail during construction. Interference with local businesses needs to be minimised as far as possible. The parties also know that underground utilities are going to be a major risk.
To manage this disruption risk, the contract contained a fee zone strategy where the project was divided into 31 separate fee zones and set occupation periods for each of those zones If a zone isn't completed on time, the contractor must pay a penalty for late completion. The maximum penalty for all delay over the life of the project is capped at seven and a half million dollars.
The contractor, having learnt from previous experience, is not willing to take the utilities risk The Contractor negotiates the right to claim extensions of time and costs if a utilities risk emerges
5 years pass and the hoarding out the front of Hunt Leather’s George Street store has just come down. That hoarding had been outside their store for 2 years. Two years of a very non-luxury shopping experience with noise, dirty windows and an unwelcoming pedestrian experience.
The once thriving store is failing. Who can Hunt Leather seek recovery from and for what? After all, the State is allowed to do road works.
A class action is commenced and a novel nuisance claim is pursued. To succeed, Hunt Leather must establish that the road works caused both substantial and unreasonable interference to their use of land.
To everyone's surprise the claim gets up and TfNSW, as the entity ultimately responsible for constructing the Sydney Light Rail, is found liable. As Julian Bailey posted on LinkedIn:13
I'm not aware of a court approaching private nuisance in this way before and it opened the possibility of disgruntled business owners / neighbours taking legal action where they can demonstrate that construction work around them has taken far too long, and for that reason is causing a real headache (and financial loss).
13 Julian Bailey, ‘Can delay to construction = a private nuisance’ LinkedIn https://www.linkedin.com/posts/julian-bailey-81911965_can-delay-to-construction-a-private-nuisanceactivity-7087450887366787075-8TNO?utm_source=share&utm_medium=member_desktop
This case is a paradigm shift for neighbours of construction projects, with financial harm suffered by project neighbours now possibly recoverable. For project owners and contractors, managing this risk becomes a higher priority.
WhatdoesCommunityCentredConstructionLookLike
The three studies above provide insight into the types of harms neighbours to construction work bear and their often difficult paths to be compensated for that harm.
The case studies also provide insight into what can manage these risks to support community centred construction.
• A Waste Disposal Problem The case study on the disposal of asbestos and other construction provides two lessons. The first is that it pays to design processes that make it easier for those involved to do the right thing. The location of waste disposal facilities was a critical issue impacting compliance in Mr James’ story. The second is that industry regulators play a crucial role, the outcomes for neighbours being highly dependent on how effective they design and operate their prevention and enforcement regimes
• Failure of Masonry Structures The 2013 wall collapse case study exposes how risk management practices common in the construction industry fail and can lead to catastrophic outcomes A 2023 paper by the author and Jodi Goodall14 argued that the bowtie methodology, common in the process safety industry, would be a preferable risk management tool that could be adopted in the construction industry to manage the risk of such rare and catastrophic failures.
• Beyond Reasonable The Hunt Leather case study is an example of a how a shift in liability will change owners and contractors’ attitudes to a risk. This case study is also a salutary tale on how a procurement model can fail to mitigate a known risk
The case studies therefore support the following issues as significant for community centred construction:
• Designing processes that make it easy for and incentivise owners and contractors to do the right thing
• Effective regulation and regulators
• Effective risk management
• Transferring liability for harm to neighbours back onto owners and contractors
• More effective procurement models
14 Kiri Parr and Jodi Goodall, ‘A Bowtie on a Bridge: The case study of a risk management technique applied to the Florida International University Bridge Failure’ (2023) NC 28.
On this last issue of procurement model design, a case study illustrative of good practice is the Major Roads Projects Victoria’s Project Delivery Approach 15
One goal of the procurement model was to improve community outcomes. The outcomes it achieved (which exceed outcomes delivered under other procurement models and industry benchmarks) were:
• the adoption of earlier and more effective community communication plans
• informed construction planning, including the identification of community preferences for blitz approaches
• early identification and intervention on struggling projects.
Three elements of the procurement model stand out as supporting these outcomes The client culture was based on a collective view that the successful delivery of each project was the owner’s responsibility, and their role was to exercise all their resources and influence to achieve that end. Next, to achieve this goal, they built up their internal expertise in community and stakeholder engagement And lastly, they use an intensive co-design phase, that takes place before the construction contract is awarded, to explicitly agree and plan the actions the contractor needs to take to deliver the agreed community outcomes. That plan is built into the incentive model and is proactively monitored.
Notaconclusionbutabeginning.
The impact of construction work on project neighbours is known and can be catastrophic. It takes the form of pollution, property damage and personal injury and financial harm. But for a long time this risk has been out of sight and out of mind. Left to the neighbours to bear.
But the visibility, cost and likelihood of this risk is increasing. Cases like Sydney Light Rail are a salutary lesson of how the law can change, returning, at least some of, the burden of these risks back to owners and contractors.
In addition to calling for increased legal liability and improved regulatory oversight, the greatest impact can be achieved when owners and contractors make community centred construction work a priority. The tools exist. It is a matter of intent.
The construction industry does not have to be a bad neighbour. It’s Sunday evening, the kids are finally in bed, and it is time to collapse onto the couch.
15 Kiri Parr and Phillip Greenham, ‘Major Roads Projects Victoria and its Project Delivery Approach: A case study of procurement reform’ (September 2023), University of Melbourne
The next-door neighbours are doing a renovation. But their builder thankfully had been very careful about locating its diesel generator on the far edge of the site to limit fumes and noise. The builder has checked in with us multiple times now. She said that the Owner she is working for had sat down with her at the outset to discuss how the work was going to be done, and that not disrupting the neighbours was a priority for them. She also commented how good it was that the local council have established a temporary waste collection point adjacent to the new estate down the road. Because it is right there, no one seems to be taking any shortcuts.
Council have also told us that they are supporting the trial of new electric equipment on this project to cut down on noise. They have also said they’ll be cleaning all the windows along the street on a weekly basis for the foreseeable future. And they are looking at a compensation scheme – they finally worked out that if half the businesses on the main street close, they were going to have a much bigger problem again.
Time to watch that Grenfell Fire documentary everyone has been talking about