Adderton v Festa Holdings Pty Ltd

The case of Adderton v Festa Holdings Pty Ltd was heard in the Supreme Court of New South Wales. The plaintiff, Adderton, purchased a property from the defendant, Festa Holdings Pty Ltd. The property had been under construction at the time of purchase, and the original contractor, who was contracted to complete the building works, had failed to take out insurance as required under the Home Building Act 1989. The original owner had also failed to attach an insurance certificate to the contract for the sale of the dwelling. Adderton sought relief on the basis that the on-seller was obliged to obtain alternative insurance cover, and that the failure to do so was a defect in title. The on-seller, Festa Holdings, argued that they were not obliged to obtain alternative insurance cover, and that the failure to obtain such cover did not constitute a defect in title. The on-seller also argued that they were entitled to give notice to complete and terminate the contract for sale.

The court had to determine whether the on-seller was obliged to obtain alternative insurance cover, whether the failure to obtain such cover constituted a defect in title, and whether an order for repayment of deposit under the Conveyancing Act 1919, s 55(2A) should be made. The court held that the on-seller was not obliged to obtain alternative insurance cover, as the original contract did not require them to do so. The court also held that the failure to obtain alternative insurance cover did not constitute a defect in title. However, the court found that the on-seller had breached the contract by failing to ensure that the original contractor took out insurance as required under the Home Building Act 1989. The court held that the on-seller was entitled to give notice to complete and terminate the contract for sale, and that an order for repayment of deposit under the Conveyancing Act 1919, s 55(2A) should be made.

The court ordered that Festa Holdings Pty Ltd pay Adderton the sum of $100,000, being the deposit paid under the contract for the sale of the dwelling. The court also ordered that the contract for the sale of the dwelling be terminated, and that the parties bear their own costs of the proceedings.