“Cladding compliance isn’t black and white: liability ultimately turns on who carries the design risk.”
Builders, developers, and Owners Corporations often face uncertainty about liability for combustible cladding. The Star Entertainment Sydney Properties Pty Ltd v Buildcorp Group Pty Ltd trading as “Buildcorp Interiors” [2026] NSWSC 27 provides guidance on compliance with the Building Code of Australia (BCA) with respect to cladding and contractual responsibility for design obligations.
Case Overview
The Star (Owner) sought approximately $4 million in damages from Buildcorp (Builder) for remedial works completed between 2014 – 2016 across 3 projects, alleging cladding non-compliance and contractual breaches.
The Owner failed on Project 1 as the Court found that the builder had no design responsibility, pursuant toa “Construct-Only” contract.
The Owner also failed on Project 2 as the Court found that the ACP cladding complied under the BCA’s attachment exception, as it stood at the time.
Contrastingly, the Owner succeeded in relation to Project 3 as the Court found that the cladding (Alpolic FR) was installed without an Alternative Solution, in breach of the BCA.
Expert evidence of architects and fire engineers was critical in this decision, particularly in relation to the classification of combustible cladding in the context of the BCA relevant at the respective time of the works.
Key Lessons for Cladding Compliance
Not all cladding is automatically defective!
Cladding can be either characterised as an ‘attachment’ or part of the external wall, the determination of which will affect whether it meets BCA standards.
As contractual design responsibility drives liability, who assumes design risk can determine claims outcomes.
A Lawyer’s Perspective
Cladding disputes are rarely straightforward, and this decision reinforces why.
What we tend to see in practice is an initial assumption that non-compliance is a given, when in reality the outcome often turns on much more nuanced factors: how the product is classified under the BCA, what the regulatory framework looked like at the time, and critically, who carried the design responsibility under the contract.
It’s that intersection, technical compliance and contractual risk, that usually determines how these matters play out.
For owners, builders and developers alike, the key issue isn’t just whether cladding can be challenged, but whether the contractual and technical position supports it.
If you’re dealing with a similar scenario, it’s often worth stepping back to understand where the design responsibility, and therefore the risk, actually sits.
Read the full case analysis here.
