Timothy Barry McDonough, 26, previously of Bates Road, has pleaded not guilty in the Warrnambool County Court to reckless conduct endangering life and criminal damage by fire (arson).

Mr McDonough has pleaded guilty to five charges of burglary and four theft offences, including at the Hoffmann family garage in Coulstock Street.

A fire started in the Hoffmann's garage about the same time Mr McDonough admits being there.

Judge Felicity Hampel said that the issues had been narrowed by Crown prosecutor Damien Hannan and defence counsel Tony Lavery in their opening addresses.

She said the only issue relating to the arson charge was did Mr McDonough deliberately light the fire?

Mr Hannan said Mr McDonough's guilty pleas to burglary and theft offences put the accused man in the area at the pertinent time.

He said the fire started between 2.30am and 3am on October 15, 2008 and the prosecution alleged Mr McDonough stole items from a garage before deliberately setting it on fire.

Mr Hannan said the Hoffmann family of Chris, his wife Rachael and their three sons Declan, then 6, Cooper, 4 and Henry, 21 months, were at home.

He said fire destroyed the garage and its contents, including a Volvo and Kia vehicles, before spreading to the house.

The garage and home had to be replaced and their neighbour's property also suffered extensive damage.

Mr Hannan said one of the Hoffmann children was unsettled on the night of the fire and Mr Hoffman went to his son. He saw light, investigated and found the garage on the west side of the house on fire.

He raised the alarm, got his wife and children out safely, called 000 and then the family watched their weatherboard home burn.

Mr Hannan said Mr McDonough admitted burglary and theft from the garage. He told friends he was concerned about a wallet and evidence he may have left behind while committing offences. He had been intoxicated and when arrested had a cigarette lighter in his possession.