Executive summary

The recent decision in The Star Entertainment Sydney Properties Pty Ltd v Buildcorp Group Pty Ltd trading as “Buildcorp Interiors” [2026] NSWSC 27,¹ highlights how contractual drafting can shape the allocation of risk and responsibility in cladding related disputes, including those involving alleged breaches of the Building Code of Australia (BCA) and fitness for purpose obligations.

Despite a $4million claim, The Star recovered just $285,662 from the builder (Buildcorp), with the Court adopting a project-by-project analysis that severely limited the builder’s exposure.²

The judgment is instructive for owners, builders, architects and insurers operating in a post-Grenfell environment, where almost a decade later, combustible cladding disputes remain relevant. This case highlights that liability will turn on the allocation of risk and not assumptions about design obligations, issues concerning fitness for purpose or industry practice.

The Star v Buildcorp

Between 2014 and 2016, Buildcorp completed three refurbishment projects at The Star Casino in Pyrmont, which included installing certain aluminium composite panel (ACP) cladding across various façades.³ Following the 2017 Grenfell Tower fire in London, the NSW Government required The Star to replace the ACPs at its own cost, which The Star did.⁴

The Star subsequently sought to recover approximately $4million in damages from Buildcorp.⁵

Buildcorp denied liability and cross‑claimed against the project architects and insurers of the sub-contractor that installed the ACPs, Ausrise Aluminium Pty Ltd (Ausrise).⁶ The sub-contractor was, as sometimes happens, in liquidation.

Although the cladding was found to be combustible, it qualified as an ‘attachment‘ under cl 2.4 of Specification C1.1 of the BCA, but only for the second project.⁷ At the time the ‘attachment’ exception allowed a combustible material, such as an ACP, to be used as an attachment affixed to a non-combustible external wall of a building.⁸

The Court ultimately found that the cladding applied to the external façade for the second project was an ‘attachment‘ and consequently did comply with the BCA.⁹ On the first and third projects, the attachment exception was found not to apply.¹⁰

The Court awarded $285,662 to The Star, finding Buildcorp liable in respect of the third project only.

Buildcorp was, in turn, entitled to be indemnified by Ausrise. The insurers of Ausrise were obliged to pay that portion of the amount which fell within the definition of ‘Property Damage‘ (as per the policy wording).¹¹ The parties agreed this was 75% of the remediation cost, being $214,247.¹²

Three projects, three different outcomes

Contract 1 – Construct‑only Contract: no design duty, no liability under Contract

Most of the quantum of The Star’s losses stemmed from the first project, but the claim under Contract 1 failed.¹³

The Court found that under Contract 1, Buildcorp had no design responsibility. This meant Buildcorp did not have a contractual obligation to ensure the architect’s design complied with the BCA. The Court said that the builder contracted to build what was drawn, and this meant that the builder did not assume liability for any drawing errors.¹⁴

As a result, the entire $3.4 million claim based on breach of Contract 1, failed.

Contract 2 – Design & Construct: The BCA “Attachment” exception

Although this was a Design and Construct contract, the ACP cladding fell within the BCA attachment exception that applied at the time, which meant the installation was compliant and reduced Buildcorp’s exposure. The Court awarded no remediation costs for The Star under Contract 2.¹⁵

Contract 3 – Express compliance obligations

Only under Contract 3, where Buildcorp expressly warranted BCA compliance and fitness for purpose, did liability arise.¹⁶ Despite proving a breach, The Star was limited to the actual costs incurred, rather than the approach it advanced during the case, being the portion of the costs estimated that ‘may’ be incurred.¹⁷ The actual costs incurred was $285,662.¹⁸

Insurance: A partial win

Although Buildcorp was found liable under the third project, it still secured a substantial indemnity from the insurer. The Court held that installing non‑compliant ACP constituted ‘Property Damage’, which triggered the subcontractor’s liability policy.

As a result, the insurers had to pay the portion of the amount that fell within the definition of ‘Property Damage’ (as per the policy wording), which were agreed to be 75% of the remediation cost at $214,247.¹⁹

Why this case matters

This decision stands out because it demonstrates that liability in combustible cladding disputes depends on contractual allocation of design and compliance risk, not around assumptions of builder responsibility.

Key takeaways

• Contractual risk allocation must be precise and decisive.
• For owners, the case is a reminder that design responsibility and fitness for purpose risks sit where the contract places these risks. This decision demonstrates that combustible cladding cases turn on the specific contractual matrix rather than general industry risk.
• For builders, this case highlights the importance of ensuring contracts explicitly state whether the builder assumes any design responsibility, and to avoid any vague wording in their contracts.
• For architects, this case reinforces the point that cladding specifications, particularly ACP products should be fully verified as BCA compliant.
• Finally, in these types of cases, the Court made clear there are insurance complications, with defective ACP constituting ‘Property Damage‘, potentially engaging insurance cover for builders. Insurers should be aware of this distinction.

Help from HWLE

Precise and decisive contractual drafting can be difficult. It is important to seek legal advice at the early stage of the contract negotiation process. Obtaining strategic support at an early stage can be vital to protecting your business’ interests and successfully completing a project. Our experienced Construction and Infrastructure team specialise in precise and decisive contractual drafting and can assist you with any queries you may have.

This article was written by Jane Wild, Partner, Jacques Lourens, Special Counsel, and Tom Dickinson, Solicitor.

¹ The Star Entertainment Sydney Properties Pty Ltd v Buildcorp Group Pty Ltd trading as “Buildcorp Interiors” [2026] NSWSC 27.

² Ibid at [8] and [440].

³ Ibid at [1] to [3].

⁴ Ibid at [2].

⁵ Ibid.

⁶ Ibid.

⁷ Ibid at [8] and [319] to [330].

⁸ Ibid at [39] and [62].

⁹ Ibid at [330].

¹⁰ Ibid at [186] and [348]. The attachment exception was removed from the BCA in 2016, see at [62].

¹¹ Ibid at [418].

¹² Ibid at [9] and [450].

¹³ Ibid at [224].

¹⁴ Ibid at [189] to [224].

¹⁵ Ibid at [9] and [331] to [335].

¹⁶ Ibid at [9].

¹⁷ Ibid at [439].

¹⁸ Ibid at [440].

¹⁹ Ibid at [9] and [450].