In the following decision from the Supreme Court of Queensland, the Buyers of an off-the-plan apartment successfully sought an order that the Contract for sale be set aside as a result of misrepresentations made by the developer’s sales representative regarding unrestricted views of the lake and beyond.
The Developer, at the time the representations were made, had lodged an application to develop the area in front of the apartment building to eleven storeys which would have impeded the views.
Facts
The defendant Buyers wished to purchase an apartment with unrestricted views and the privacy of not having occupants in other highrise apartments looking into theirs. The Buyers saw a newspaper advertisement for an off-the-plan development offering “exclusive penthouse apartments with views from Surfers Paradise to Burleigh”. They visited the sales centre where they informed the plaintiff Developer’s sales representative of their requirements regarding unobstructed views.
The Buyers were interested in purchasing a penthouse apartment on level nine of the Bella Vue building. The sales representative informed the Buyers that they would be able to look over the top of the town centre and indeed all other buildings that were proposed to be built, from the level nine apartment. The Buyers were also informed that they would have unimpeded views of a lake and the horizon which could not be impeded as the Developer “controlled all the sites in front [of the apartment building]”.
As a result of these discussions, the Buyers entered into a contract to purchase the apartment. Contracts were prepared and various special conditions in relation to certain items to be installed in the apartment were included, at the Buyers’ insistence. The Buyers did not seek to insert a special condition in relation to views.
At the time the Buyers had the above conversation with the sale representative, the Developer had made an application to the Council for approval to develop the area in front of the Bella Vue building to up to 11 storeys. After signing the Contract, the Buyers again visited with the sales representative. There they noticed a model of a high rise building which appeared to be between 10 and 12 stories high. If constructed, the building was likely to interfere with the buyers’ views of the lake and beyond.
The Buyers claimed they were induced to enter into the Contract by a misrepresentation about the views and were entitled to terminate the Contract. Notice of termination was given and the Buyers requested the return of the deposit. However the Developer did not accept the Buyers’ purported termination and commenced proceedings against the Buyers for specific performance. The Buyers sought a declaration pursuant to then s 87 of the Trade Practices Act 1974 (now s 237, 238 of the Australian Consumer Law) that the Contract was void or alternatively an order that it be set aside.
Decision
The Queensland Supreme Court found that the sales representative did make the representations about the views that would be enjoyed from the Buyers’ apartment once built. The sales representative acted within his authority and the Developer was therefore deemed, for the purposes of the Trade Practices Act, to have engaged in that conduct.
The Court found that such representations were misleading and deceptive, triggering then s 51A of the Act (the equivalent provision is now found at s 4 of the Australian Consumer Law). Section 51A provided that representations as to future matters were deemed to be misleading if there were no reasonable grounds for making the representation.
The Court ultimately found in favour of the Buyers determining that the Buyers did suffer damage as a result of the Developer’s misrepresentations regarding the view. The Buyers also successfully argued that they would suffer loss if compelled to complete the Contract as a result of the large differences between the then current market value of the apartment and the agreed price. As a result, the court determined that the Contract should be set aside.
Citation: Nifsan Developments Pty Ltd v Buskey & Anor [2011] QSC 314
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