Home Buyers need to check their Home Warranty Insurance Certificate very carefully - The Builders Lawyer
A recent CTTT decision in Tilley v Allianz Australia Insurance Ltd (Home Building) [2006] NSWCTTT 293 has signaled a second warning, since the first warning in the Supreme Court decision in Susan Elizabeth Taylor v Dexta Corporation Ltd & Ors [2005] NSWSC 974, to home owners, and successors in title, to read carefully a Home Warranty Insurance Certificate before accepting it.
In each of the cases, the Home Warranty Insurance Certificate in question carried a statement from the insurer that the Certificate was "ONLY VALID for a contract entered into by [the builder] dated between [a specified date] and [another specified date]". It was however found in both cases that the respective contracts were in fact entered before the home owner warranty insurance policies were issued as well as before the policy periods that were specified in those policies, and under such circumstances, the insurers were held to be able to resist the insurance claims from the owners notwithstanding that premiums had been paid and Home Warranty Insurance Certificates were issued in respect of their respective properties.
Nicholas J in the Taylor v Dextra case stressed that as the insurance policy is a commercial contract it should be given a business-like interpretation which "requires attention to the language used by the parties, the commercial circumstances which the document addresses, and the objects which it is intended to secure". The facts that a premium has been paid and a Home Warranty Insurance Certificate has been issued in respect of the specified property were held not sufficient for the Court to order rectification to the specified policy dates of the insurance. And the certificate's invalidity will not necessarily appear on its face. If this affects you contact us to discuss the situation.
For a successor in title who is not a party to the building contract, it is vital therefore to make further enquiry into the necessary contract of insurance details before accepting a Home Warranty Insurance Certificate that carries a similar qualifying statement to that in these cases.
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