Failures
Can a builder be held liable when a homeowner’s own design fails? In Allan v Renfay Projects Pty Ltd [2025] NSWDC 357, Newlinds SC DCJ gave a clear answer: statutory warranties under the Home Building Act 1989 (NSW) do not make builders guarantors of an owner’s design performance.
A Brief Background
Iain Allan hired Renfay Projects to repair a leaking roof and gutter system under a fixed-price contract. During construction, Mr Allan replaced the builder’s proposal with his own design, prepared with informal input from an engineer. Renfay built exactly to that amended design, which the engineer later certified as satisfactory.
Several years later, leaks reappeared. Mr Allan sued, alleging breaches of the statutory warranties in section 18B, and sought over $360,000 in damages.
The Court’s Reasoning
Newlinds SC DCJ dismissed the claim, finding the defects were “caused solely by the plaintiff’s own design.” His Honour began by reaffirming that statutory warranties must be read in context:
“The statutory warranties under section 18B must be assessed by reference to the contract that created them.”
Because the contract incorporated Mr Allan’s design, the builder’s duty was limited to executing that design competently. His Honour warned that accepting the plaintiff’s argument would effectively require the builder “to breach the very contract that creates those obligations by building something different.”
The Court rejected what it called a “stark legal proposition” that a builder is automatically liable if an owner’s design does not work. Instead, liability turns on causation. If the design itself is the source of the problem, the builder is not responsible.
“Relates Solely” Means “Caused Solely By”
A central interpretive issue was the phrase “relates solely” in Schedule 2 clause 2(2)(a), which excludes liability where a defect relates solely to an owner’s design. Mr Allan argued that this applied only if the builder followed the plans exactly.
His Honour rejected that narrow view, holding that “relates solely” means “caused solely by”. The focus, he said, must be on the proximate cause of the defect, not on the literal act of following plans. The evidence showed that the gutter system’s design flaws meant the leaks “would have occurred anyway, even if the work had been executed with complete skill.”
By grounding the clause in causation, the Court ensured it had real work to do, distinguishing the decision in The Owners – Strata Plan No 66375 v King [2018] NSWCA 170, which involved legal non-compliance rather than an owner’s defective design.
Section 18F Defence
The builder also succeeded under section 18F, which protects builders who rely on written instructions from an owner or an independent professional. The engineer had approved Mr Allan’s amended design in writing, describing it as “a good alteration to the proposal,” and later certified the work as satisfactory.
Newlinds SC DCJ found that the engineer was “a relevant professional acting for the owner who was independent of the builder,” satisfying the statutory defence and providing a complete answer to the claim.
Implications for Industry
This decision narrows uncertainty around the allocation of design risk. Builders remain responsible for workmanship and compliance with the law, but not for whether an owner-supplied design will perform as hoped.
The reasoning aligns the Home Building Act with common-sense principles of causation. As His Honour observed, liability should not be imposed where “the proximate cause of failure lies in the design rather than in the execution.”
For builders, the practical lesson is clear: keep comprehensive written records of instructions, variations, and third-party certifications. Such documents can be decisive evidence that the work was carried out strictly within the agreed scope and under the client’s direction.
For homeowners and developers, the judgment is a reminder that altering or providing your own design transfers performance risk. Once a builder constructs exactly what you specify, defects that arise from that design will be yours to bear.
Takeaway
Allan v Renfay Projects Pty Ltd confirms that statutory warranties operate within the practical limits of contract and causation. Builders are liable for how they build, not for what they are told to build.
Or, as this judgment makes plain, when a defect begins at the drawing board, responsibility ends there.