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Ippolito v Cesco

Ippolito v Cesco

Case [2020] NSWSC 561 14 May 2020

Breach of Contract

Specific Performance

Limitation Periods

Building and Construction Law

Civil Litigation & Procedure

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Supreme Court

New South Wales

Medium Neutral Citation: Ippolito v Cesco [2020] NSWSC 561
Hearing dates: 27 to 28 April and 4 May 2020
Decision date: 14 May 2020
Jurisdiction: Equity - Technology and Construction List
Before: Ball J
Decision:
Judgment for the plaintiff in the sum of $380,509.03

Catchwords: BUILDING AND CONSTRUCTION – Breach of statutory warranties in the Home Building Act 1989 (NSW), s 18B – Application s 48MA of the Home Building Act 1989 (NSW) to proceedings brought before the Supreme Court – Whether the Court will order specific performance of a building contract - Whether damages for loss of rent were in the parties’ reasonable contemplation at the time the contract was entered into – Distinction between difficulty of assessing damages and failure to take reasonable steps to prove damages suffered.
Legislation Cited: Home Building Act 1989
Cases Cited: Adams v Morellini [2010] WASC 61
Bellgrove v Eldridge (1954) 90 CLR 613
Biggin v Permanite [1951] 1 KB 422
Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486
Graham H Roberts Pty Ltd v Maurbeth Investments Pty Ltd [1974] 1 NSWLR 93
Hadley v Baxendale (1854) 9 Exch 341
JLW (Vic) Pty Ltd v Tsiloglou [1994] 1 VR 237
NCON Australia Ltd v Spotlight Pty Ltd [2012] VSC 604
Owners – Strata Plan No 76674 v Di Blasio Constructions Pty Ltd [2014] NSWSC 1067
Owners Strata Plan 78465 v MD Constructions Pty Ltd [2016] NSWSC 162
Placer v Thiess (2003) 77 ALJR 768
The Commonwealth v Amann Aviation Pty Limited (1991) 174 CLR 64
Texts Cited: JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow and Lehane’s Equity Doctrines and Remedies, LexisNexis Butterworths, 5th ed (2015)
Category: Principal judgment
Parties: Steffan James Ippolito (Plaintiff)
Michael Cesco (First Defendant)
Michael Cesco t/as Grid Projects Pty Ltd (Second Defendant)
Representation:
Counsel:
DS Weinberger (Plaintiff)
L Shipway (Defendants)
Solicitors:
Project Lawyers (Plaintiff)
Robert King (Defendants)

File Number(s): 2018/285545

Judgment

Introduction

These proceedings concern alleged defects in a dual occupancy residential development in Willoughby (the Development). They raise the following questions:

whether the defects claimed by the plaintiff, Mr Ippolito, the owner of the land on which the Development was erected, exist or existed;

whether, if defects exist, the Court should make an order requiring the contractor to rectify the defects rather than awarding damages for the costs of rectification;

if the Court should award damages, what those damages should be.

Factual background

On 13 July 2011, Mr Ippolito entered into a contract with Mr Cesco for the construction of the Development for a total price of $3,283,411.78 (including GST). The contract is in the form of the Australian Institute of Architects/Master Builders Australia ABIC SW-2008 H NSW Simple Works Contract for Housing in New South Wales (the Contract). It described the contractor as “Michael Cesco (Grid Projects P/L)” and for that reason both Mr Cesco and “Michael Cesco trading as Grid Projects Pty Ltd” were named as defendants in the proceedings. However, Mr…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Ippolito v Cesco

Details

AGLC: Ippolito v Cesco [2020] NSWSC 561
Case: [2020] NSWSC 561
Decision Date: 14 May 2020

CaseChat Overview and Summary

In the case of Ippolito v Cesco, the applicant sought specific performance of a building contract, as well as damages for loss of rent, from the Supreme Court of New South Wales. The applicant, who owned a property, had entered into a building contract with the respondent, a builder, to construct a granny flat on the property. The contract was governed by the Home Building Act 1989 (NSW), which includes statutory warranties and provisions for specific performance and damages.

The primary legal issues the court addressed were whether the Supreme Court could order specific performance of the building contract under section 48MA of the Home Building Act 1989 (NSW), and whether damages for loss of rent were within the parties’ reasonable contemplation at the time the contract was entered into. The court also had to distinguish between the difficulty of assessing damages and the failure to take reasonable steps to prove damages suffered.

The court held that specific performance was not an appropriate remedy in this case, as it was not in the applicant's interest to compel the respondent to complete the building works. The court also found that damages for loss of rent were not in the parties' reasonable contemplation at the time the contract was entered into, as the applicant did not provide evidence of the loss of rent. The court further clarified that while it may be difficult to assess damages, a party must take reasonable steps to prove the damages suffered. Ultimately, the court dismissed the applicant's application.

The court ordered that the applicant pay the respondent's costs of the proceeding, which were assessed on the standard basis. The court emphasised that the applicant's failure to provide evidence of loss of rent was a significant factor in its decision not to grant specific performance or damages for loss of rent. The court also noted that the parties should have considered the implications of the Home Building Act 1989 (NSW) and its provisions for specific performance and damages before entering into the building contract.

Orders