The Owners – Strata Plan 80647 v WFI Insurance Limited t/as Lumley Insurance [2015] NSWSC 1161

Supreme Court New South Wales

Medium Neutral Citation: The Owners – Strata Plan 80647 v WFI Insurance Limited t/as Lumley Insurance [2015] NSWSC 1161 Hearing dates: 25 June 2015 Date of orders: 18 August 2015 Decision date: 18 August 2015 Jurisdiction: Equity Division - Technology and Construction List Before: Darke J Decision: Separate question answered in the negative. Second defendant's application for striking out or dismissal refused. Catchwords: BANKRUPTCY – provable debts – contract between builder and developer contains warranties implied by Home Building Act 1989 (NSW) – builder becomes bankrupt – claimant owners corporation a successor in title to developer – claim by owners corporation against builder for damages for loss suffered by reason of breach of statutory warranties – whether a debt or liability provable in the bankruptcy – whether a debt or liability released upon discharge from bankruptcy – whether claim a demand arising "otherwise than by reason of a contract or promise" within s 82(2) Bankruptcy Act 1966 (Cth)

CONSTRUCTION LAW – Home Building legislation – statutory warranties – claim by successor in title to developer in respect of statutory warranties – builder becomes bankrupt and is subsequently discharged from bankruptcy – whether claim by successor in title a debt or liability provable in the bankruptcy – whether claim a debt or liability released upon discharge from bankruptcy – Home Building Act 1989 (NSW) ss 18B and 18D

INSURANCE – Home Owners Warranty insurance – claim for indemnity for loss or damage arising from breach of statutory warranties – claim against contractor a debt or liability released upon contractor's discharge from bankruptcy – claim for indemnity made after the discharge from bankruptcy – whether claimant cannot recover compensation from contractor "because of the insolvency" of contractor Legislation Cited: Bankruptcy Act 1869 (UK) s 31 Bankruptcy Act 1966 (Cth) ss 82, 153(1) Home Building Act 1989 (NSW) s 18B, 18C, 18D Cases Cited: Abouslieman v Mercantile Mutual Insurance (Australia) Ltd [2003] FMCA 594 Abouslieman v Mercantile Mutual Insurance (Australia) Ltd [2004] FCA 1055 Aliferis v Kyriacou (2000) 1 VR 447 Australian Competition and Consumer Commission v Kritharas [2000] FCA 1442; (2000) 105 FCR 444 Baron Corporation Pty Ltd v Owners of Strata Plan 69567 [2013] NSWCA 238 Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 [2014] HCA 36 Coventry v Charter Pacific Corporation Limited [2005] HCA 67; (2005) 227 CLR 234 Gye v McIntyre (1991) 171 CLR 609 Jack v Kipping (1882) 9 QBD 113 Lovell v Penkin [2008] FCA 637 Re Giles; Ex Parte Stone (1889) 61 LT (NS) 82 Reid v Interarch Australia Pty Ltd [2000] FCA 1328 The Owners – Strata Plan No 51077 v Meriton Apartments Pty Ltd [2014] NSWSC 1761 Category: Principal judgment Parties: The Owners – Strata Plan 80647 (plaintiff) WFI Insurance Ltd t/as Lumley Insurance (first defendant) Lawrence Crestani (second defendant) Representation: Counsel: J Young (plaintiff) C Purdy (first defendant) C Stomo (second defendant)