Following the Grenfell Tower fire in London, England in 2017, the NSW Government (along with many other governments around the world) mandated the removal of aluminium-polyurethane composite panels (ACPs).

The Supreme Court of NSW was recently tasked with determining liability with respect to the use of ACPs in Star Entertainment Sydney Properties Pty Ltd v Buildcorp Group Pty Ltd (t/as Buildcorp Interiors) [2026] NSWSC 27.

The Court ultimately found that, with respect to three separate projects, the builder was not liable for damages in respect of two of those projects, as it had expressly contracted out of design responsibility (first project) and the materials used were, at the time, compliant with the Building Code of Australia (BCA) (second project). For the third project, it was found that the Defendant was liable for non-compliant works.

Key findings include:

• A distinction between design responsibility and design management. Engaging with the design of a project and making recommendations to enhance “buildability” may stray into a design consultant’s area of responsibility – it is essential to ensure that a builder’s exposure to liability for design responsibility is expressly excluded in construct only contracts
• That the builder was not liable for breach of a warranty that the works would comply with the BCA when using a product specified by the architect stating “the builder was not qualified to design, but to build”
• That the builder would not have had a cross-claim against the designer for negligence as the builder was not ‘vulnerable’, given that the parties were experienced, professional, and had negotiated the agreements at arm’s length, and so, no duty of care was found to be owed to the builder by the architect
• Consideration of BCA compliance is heavily dependent on the individual circumstances of each matter and determined on a case by case basis – including consideration to the contractual relationships between the parties, and the BCA provisions which are relevant at the time the construction has taken place. This means building practitioners must continuously inform themselves of current BCA provisions / revisions, and compliance requirements. It is necessary to ensure that builders are sufficiently protected when contracting with any party engaged to provide design input

Background

Star Entertainment Sydney Properties Pty Ltd (Star) engaged Buildcorp Group Pty Ltd t/as Buildcorp Interiors (Buildcorp) to undertake three refurbishment projects for Star Casino from 2014 to 2016, which involved the use and installation of ACPs on the building’s exteriors.

Star claimed approximately $4m in damages from Buildcorp, and the latter sought indemnification and attributed liability to architect Malone Buchan Laird & Bawden Pty Ltd t/as the Buchan Group (Architect) and subcontractor Ausrise Aluminium Pty Ltd (Ausrise).

The Court considered whether the Star was a consumer for the purposes of the Australian Consumer Law and determined it was not.

All parties involved in each project were contractually obliged to ensure the building work complied with the BCA. Specifically, the external walls of the casino complex were required to be “non-combustible”. The Builder proposed, and Star approved, the use of an ACP for the façade called Alpolic/fr (Alpolic FR); however, the engaged experts agreed that Alpolic FR was not “non-combustible” due to the polyethylene used in the panel, noting that all ACP’s are “combustible” and did not comply with the ‘Deemed to Satisfy’ provisions of the BCA.

Key Findings – First Project

Project value: approx. $3.4m

• The Claim: Star engaged Buildcorp under a ‘construct only’ contract. Relevantly, clause 3.4 of the building contract stated that the Contractor will perform ‘Design Management’ but will not have any Design Responsibility in connection with the Works. Star sought to rely solely on the builder’s warranty in the building contract, that Buildcorp warranted the works would comply with the BCA (BCA Warranty). Star contended that it was entitled to damages for breach of contract.
• Design Responsibility: The Court found that the BCA Warranty was subject to the overriding acknowledgement that Buildcorp did not hold any design responsibility. If not, this would render that acknowledgement “useless”. The Court stated that “put bluntly, the builder was not qualified to design, but to build”. The Court rejected Star’s submissions that Buildcorp was responsible for the choice of Alpolic FR and was not found liable for a breach of the BCA due to its role in the design element.
• Whether Buildcorp breached its warranty: the Court found that the consideration and choice of Alpolic FR fell within the definition of Design Responsibility and that such responsibility rested with the Architect.
• Cross-claim: the Court considered the alternative i.e. if Buildcorp did have design responsibility for the ACPs, whether Buildcorp had a cross-claim against the Architect in tort. The Court found that the Architect was deemed responsible for BCA compliance, but Buildcorp was not ‘vulnerable’, given that the parties were experienced, professional, and had negotiated the agreements at arm’s length, and so, no duty of care was found to be owed to Buildcorp by the Architect.

Key Findings – Second Project

Project value: approx. $285k

• The Claim: In around February 2015, the Architect issued drawings for the second project – which included samples of materials to be used for external finishes. Alpolic FR was not included in those samples. In April 2015, Star and Buildcorp entered into a ‘Design and Construct’ contract for the second project. Following this, the Architect’s updated for-construction drawings included Alpolic FR. These plans were not approved by the certifier. In around July 2015, the CodeMark Certificate of Conformity was revised – Alpolic FR was deemed to now have the capacity to comply with the BCA where the product was used as an external wall attachment.
• BCA Compliance: the Court found that an ACP applied to an external façade was an attachment, so long as certain criteria were satisfied, and as such the use of Alpolic FR on the external façade of the second project did comply with the BCA. Therefore, there was no breach of warranty by Buildcorp.

Key Findings – Third Project

Project value: approx. $285k

• The Claim: Star and Buildcorp entered into a minor works contract for the third project. Star submitted that, where no ‘Alternative Solution’ was approved, the construction certificate was approved to the Deemed-to-Satisfy provisions only. In December 2015, during the third project, the CodeMark Certificate of Conformity was revised again – Alpolic Cladding System did not provide full fire resistance for the building. Cladding installation began in January 2016.
• BCA Compliance: There was no Alternative Solution in place when the third project was undertaken. The Court found that the use of Alpolic FR on the third project did not comply with the BCA.
• Findings: under the minor works contract, Buildcorp was required to design and construct the associated façade, which was required to comply with the BCA requirements. Buildcorp gave a warranty that the works would comply with the requirements of the contract. The Court found that the works when completed did not comply with the BCA. Therefore, Buildcorp had breached its warranty under the contract and Star was found to be entitled to damages.
• Subcontractor: the Court considered whether Ausrise, the cladding installer, was liable to the Buildcorp by way of the terms of the subcontract. The Court noted that the subcontract works were required to be fit for purpose and comply with the BCA, to which Ausrise gave a warranty. Ausrise also agreed to indemnify the builder in connection with any claim under the Building Legislation, to the extent it arose from an act by the subcontractor. Buildcorp was required to establish that there was ‘property damage’ within the meaning of the relevant insurance policy held by Ausrise. The Court found that the non-compliant ACPs constituted property damage.