Federal Court rejects cladding class action

In Owners – Strata Plan No 87231 v 3A Composites GmbH (No 10) [2026] FCA 351, the Federal Court dismissed a class action concerning aluminium composite panel (ACP) cladding products marketed as Alucobond PE and Alucobond Plus. The proceeding was brought by a NSW strata owners corporation on behalf of current and former owners/leaseholders of buildings fitted with ACPs against the manufacturer/supplier of those products.

Background

The proceeding was a class action concerning ACP cladding products used on buildings in Australia. The first respondent (3A Composites GmbH) was the German-based manufacturer of the Alucobond products and the second respondent (Halifax Vogel Group Pty Ltd) was the Australian supplier/distributor.

The applicants advanced two primary causes of action:

• a “consumer guarantee” case alleging the products were not of acceptable quality (ACL s 54)/not of merchantable quality (TPA s 74D), including by reason of alleged fire-risk properties and Building Code of Australia (BCA) non-compliance when used as promoted; and
• a misleading conduct/false representation case (including ACL ss 29 and 33) based on extensive marketing material alleged to have conveyed that the products were safe, suitable and compliant, and that adequate warnings were not provided.

The decision

The Court rejected the applicants’ case that the Alucobond products were not of acceptable/merchantable quality at the time they were supplied. The Court was not persuaded that the products were incapable of safe and compliant use across the range of building contexts captured by the class definition, and treated questions of safety and compliance as dependent on building-specific design, certification and installation choices.

The Court also identified significant threshold and structural obstacles to the consumer guarantee claim, including whether there was a relevant supply to a consumer, whether strata corporations acquired the products or derived title through developers, and whether ACPs affixed to buildings retained their character as consumer goods. Given the performance‑based nature of the BCA, the Court emphasised that safety, compliance, causation and loss were inherently building‑specific and dependent on the decisions of qualified professionals, making the alleged lack of acceptable or merchantable quality incapable of determination on a class‑wide basis.

Lastly, the Court rejected the applicants' misleading conduct/false representation case. Among other matters, the Court approached the alleged representations by reference to the context in which marketing material was used (including the knowledge and role of building professionals) and emphasised the evidentiary burden of proving reliance and causation for claimed loss.

Key takeaways

This case highlights the practical difficulty of using the class action regime for the purposes of building actions, where every building is unique and needs to be assessed individually.

The case also highlights the many hurdles to succeeding in a claim for misleading and deceptive conduct. In this instance, the "audience" receiving the representations (i.e. qualified professionals) was contextually relevant, as was what the professionals would do with the information provided.