1. Introduction

When a builder constructs a project strictly in accordance with the owner’s or architect’s plans, and the resulting defects stem from those plans, who bears responsibility – the builder or the designer?

This question lies at the heart of design liability under the Home Building Act 1989 (NSW) (“HBA”). Recent developments revisit the boundaries of this issue and cast light on how the section 18F defence operates to shield builders from liability where design errors are to blame.

While Tribunal Appeal Panel decisions suggest builders must critically review and question the adequacy of any design before building, the District Court’s reasoning in Allan v Renfay hints at a pragmatic recalibration.

2. The Statutory Framework – Duties and Defences

Under section 18B of the HBA, every residential building contract implies a series of statutory warranties including that the work will:

• be carried out with due care and skill;
• comply with the plans, specifications and the law; and
• be fit for its intended purpose.

The requirement to comply with “the law” requires the works to comply with the National Construction Code and relevant Australian Standards as these are conditions imposed by the development approval.

However, section 18F of the HBA offers a statutory defence to builders. If defects arise solely from following the written instructions of an independent “relevant professional”, or contrary to written advice previously given, the builder may escape liability.

In practice, this provision is narrow because it requires builders to:

1. obtain written instructions before carrying out the work;
2. ensure those instructions come from a professional independent of them; and
3. establish that the defect complained of arose solely from those instructions.

3. NCAT’s Approach: The High Bar of Builder Diligence

Tribunal and Appeal Panel authorities have tended to interpret section 18F strictly against builders.

In Catapult Constructions Pty Ltd v Denison [2018] NSWCATAP 158 (“Catapult”), the Appeal Panel held:

“For a section 18F defence to succeed there must be, prior to carrying out the work, an enquiry by the builder as to the adequacy of the design and a written instruction to proceed from the consultant.”

The logic reflects both statutory purpose and the common law duty to warn. Builders are expected to “think critically” to assess whether a design is “questionable or unbuildable” before proceeding. Building in accordance with the approved plans is insufficient, in the eyes of the Appeal Panel, to activate the Section 18F Defence.

Following Catapult, decisions such as RBV Builders v Chedra [2021] and BlueSky Property Builders v Dey [2023] reinforced that builders cannot rely on section 18F unless they demonstrate active diligence: written enquiries, documented professional advice, and reliance on those instructions.

This defence seems rarely available in practice because most builders fail to obtain formal written instructions prior to construction.

4. The District Court’s View

In Allan v Renfay Projects Pty Ltd [2025] NSWDC 357 (“Allan v Renfay”), where the homeowner alleged that the builder was liable for water ingress following roof remediation works. The works had been carried out in accordance with a design supplied by the owner and certified by an independent engineer. The Court dismissed the claim, rejecting the argument that the builder was liable simply because the design proved ineffective.

Newlinds SC DCJ found that such a “stark proposition” would effectively nullify the protections afforded to builders under sections 18F and 7E, leading to the untenable result that a builder could only avoid liability by breaching its contract:

“… [T]he only way a builder could comply with its contractual obligations would be to breach the very contract that creates those obligations by building something different to that required by the contract. That cannot have been the intention of the legislation.”

Instead, the Court proposed that the works required to be done under the contract must first be identified, and then to judge whether the statutory warranties have been complied with or not.

For builder’s the decision reflects a welcome judicial reluctance to impose design liability on builders in construct-only contracts, unless they have negligently proceeded with a design that was obviously defective or unlawful. It reinforces that builders are not to be treated as default designers and must not be held liable where they have executed the works in line with the agreed scope and certified design.

5. How the District Court of NSW Diverges from NCAT’s Earlier Line

The District Court’s analysis in Allan v Renfay arguably narrows the builder’s pre-construction burden compared with the Appeal Panel decisions.

Where NCAT requires a builder to question and assess the adequacy of the design proactively, Allan accepts that a builder may reasonably rely on a design prepared or endorsed by the owner or a relevant professional unless the builder knew, or ought to have known, that the design was defective or unlawful.

In doing so, Allan v Renfay aligns more closely with commercial contract reasoning, particularly the District Court’s earlier dicta in Deane Projects, rather than the Tribunal’s more exacting stance.

Conclusion

The tension between Tribunal and Court interpretations of section 18F continues to evolve. The Appeal Panel’s approach emphasises enquiry and diligence, while the District Court in Allan v Renfay adopts a more causal and contractual test focusing on whether the defect “relates solely” to the design, not on whether the builder challenged it.

Builders would be wise to assume the safer, NCAT-compliant path: review, document, and confirm. Yet Allan v Renfay offers reassurance that, where a builder follows the owner’s or consultant’s design faithfully, liability should not attach merely because the design later proves faulty.

Key Takeaways

• Section 18F remains a strong and complete defence for builders operating under construct-only contracts, but success depends on documenting reliance on expert or owner instructions.
• The builder must not ignore clear and apparent defects or unlawfulness. If something is obviously non-compliant with the BCA, the builder is expected to raise it.
• The District Court’s recent decisions emphasise that builders should not be forced to become de facto design consultants. Their duty to warn is qualified, not absolute.
• Builders should carefully preserve correspondence showing written reliance and instructions from owners, architects or engineers, especially when concerns arise.
• Ultimately, a balanced approach is emerging in the courts, which protects builders from undue liability while still ensuring reasonable diligence in executing third-party designs.

References:

• Allan v Renfay Projects Pty Ltd [2025] NSWDC 357
• Catapult Constructions Pty Ltd v Denison [2018] NSWCATAP 158
• BlueSky Property Builders Australia Pty Ltd v Dey [2023] NSWCATAP 153
• RBV Builders Pty Ltd v Chedra [2021] NSWCATAP 56