Ippolito v Cesco

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.