Developer’s big sunset victory

Supreme Court decision a blow to buyers

THE Supreme Court of Queensland has ruled in favour of a developer which terminated the contracts of residential land buyers after refusing to pay a council infrastructure charge.

Nine purchasers took developer Hodge & Lawe Park Ridge Ltd to court seeking an order that it had not validly terminated their contracts to buy lots at 206 Bumstead Rd in Park Ridge.

Hodge & Lawe’s sole director is 40-year-old Chinese national Feng Wan, with an address at a two-bed suburban unit in Doncaster, Melbourne.

The judgment states on February 21 this year Logan City Council (LCC) issued a notice confirming its requirements for operational works by the developer had been completed.

Four days later the developer received a quote from council of $290,198.82 for infrastructure charges. Council “required to be paid as a prerequisite for the sealing of the survey plan”.

“The respondent is unwilling to pay and has not paid the quotations, and therefore the survey plan has not been sealed,” the judgment states.

Between May 23 and June 1 solicitors for the developer issued notices to the buyers terminating their contracts under a special condition.

The condition invoked states:

“If any Authority refuses to grant or revokes any necessary permit or approval or refuses to seal any survey plan or imposes any conditions on any permit, certificate or approval with which the Seller is unwilling to comply, the Seller may terminate this contract by notice to the Buyer. If this happens, the Buyer’s only right is to a refund of the Deposit.”

According to the judgment, the condition to which the developer was “unwilling to comply” was the requirement to pay the infrastructure charges.

Buyers challenged the termination on the grounds that the need to pay the charges was “a pre-existing obligation” and the special condition was “prospective in operation”.

The buyers argued that to see the special condition otherwise would give the developer “a right to terminate the contracts at will”.

The developer countered the clause applied to all conditions, “regardless of the time of imposition”.

Citing a previous similar case, Justice Melanie Hindman found the developer had “validly terminated the purchase contracts”.

Justice Hindman found the developer was “unwilling (honestly) to pay the quoted infrastructure charges” and had therefore “properly relied” on the special condition quoted.

News of the judgment, published on September 2, comes as the state government seeks feedback on the use of special clauses in ‘off the plan’ contracts.

The Queensland Government is examining them as part of its Property Law Review.

Consumers and developers can have their say in special surveys hosted on the Office of Fair Trading website. The surveys close on September 14.