Festa Holdings Pty Ltd v Adderton

Reported Decision: (2005) NSW ConvR 56-117

Court of Appeal

CITATION:	FESTA HOLDINGS PTY LTD & ANOR v ADDERTON & ORS [2004] NSWCA 228
HEARING DATE(S):	2 June 2004
JUDGMENT DATE:	13 July 2004
JUDGMENT OF:	Mason P at 1; Sheller JA at 62; Stein AJA at 63
DECISION:	Appeal dismissed with costs
CATCHWORDS:	Vendor and Purchaser - Home Building Act 1989 - certificate of insurance - contract to do residential building work - subsequent contract for sale of residential property - termination - forfeiture of deposit - whether certificate of insurance is part of the title of the property - whether lack of insurance a defect in title enabling purchaser to terminate - whether subsequent purchaser obliged to procure insurance. (D)
PARTIES :	FESTA HOLDINGS PTY LTD (In liquidation) Lawrence MORASCHI (2nd Appellant) Peter ADDERTON (1st Respondent)
FILE NUMBER(S):	CA 41230/03
COUNSEL:	2nd Appellant: B S Oslington SC/ A Maroya Respondent: A C M Iuliano
SOLICITORS:	2nd Appellant: John Byrnes & Assoc Respondent: Colin Biggers & Paisley

LOWER COURTJURISDICTION:	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S):	SC 1253/03
LOWER COURT JUDICIAL OFFICER :	Gzell J

CA 41230/03

MASON P
SHELLER JA
STEIN AJA

Tuesday 13 July 2004

FESTA HOLDINGS PTY LTD & Anor v ADDERTON & ORS

BACKGROUND

A vendor purported to terminate a Contract for sale of a residential property at Curl Curl. His entitlement to forfeit the deposit hinged upon whether the purchaser was entitled to insist that he provide a certificate of insurance under s92 of the Home Building Act 1989 as part of the “title” of the property contracted to be sold.

The Contract was exchanged on 17 September 2002. The first respondent, Mr Adderton was the Vendor and the first appellant, Festa Holdings Pty Ltd, was the Purchaser. Half of the deposit was paid to the Vendor’s agent upon exchange. The remaining half was payable upon completion or default by the Purchaser, this liability being backed by the guarantee and indemnity of the second appellant, Mr Moraschi, the sole director and shareholder of the Purchaser.

On 30 September 2002 the Purchaser’s solicitor issued requisitions on title which included an inquiry as to whether any building work had been done on the property since 21 March 1990 and if so, it was requested that details of the relevant insurance under the Building Services Corporation Act 1989 be furnished.

The Vendor’s solicitor replied stating that building work had been done in 1999. In response to the request for details of insurance, the solicitor supplied copies of letters from Dexta Corporation, an agent for Allianz Austrlia Insurance Ltd, which stated that Dexta was unable to provide a copy of a statutory certificate of insurance because it had never been issued to the original building contractor and it did not exist.

Completion did not occur in 3 months in accordance with the Contract, despite the Vendor being ready, willing and able. On 18 December 2002 the Vendor issued a notice to complete requiring completion on 6 January…