As predicted, a disputed flood damage contract termination where a buyer alleges the property is uninhabitable, is already before the Supreme Court.

None other than Maris Dunworth, the Tennyson Reach buyer defeated by Mirvac in December when she was ordered to settle her $2.3 million off-the-plan ground floor apartment she contracted to buy during “frenetic” pre-release negotiations in mid-2007, has filed for court approval of her rescission.

The December order also requires she pay Mirvac $500,000 in interest and their legals in a similar amount.

Between judgment and the ordained settlement date – 8 February – came the great deluge and the January 13 Brisbane River flood which carried 600mm of muddy water and debris through the luxury dwelling.

With the shoe now firmly on the other foot, Dunworth promptly rescinded (again) this time relying on Property Law Act s 64 which entitles buyers to terminate before the earlier of the date of possession or settlement, if a residential property under contract has been rendered “substantially unfit for occupation”.

Mirvac employees have since then been beavering around the complex to restore the apartment to its antedeluvian state but they could not complete the repairs by the settlement date and sought an extension until June to do so.

Dunworth’s new lawyers – appointed in January – filed an application on 2 February to validate the rescission and have the December specific performance order vacated.

The application was heard urgently two days later when Mirvac successfully argued that the rescision issue could not be decided summarily but should be sent for (another) trial. At the same time Mirvac cross applied for an order allowing a four-month extension of the settlement date until June.

The dispute, which is now stuffed full with legal points that are compelling and at the same time mundane, has been transferred to the commercial list and one would expect could be decided within months.

The flood may mark the beginning of the denouement for the “Tales of Tennyson Reach“. There are however many more parts yet untold and this twist may itself prove worthy of several chapters, including one played out in another court.

To mash metaphors, the worm has not only turned, it may cause others to squirm.

* Dunworth v Mirvac Qld P/L (No 3) [2011] QSC 027 (09/4514)  Margaret Wilson J  7/02/2011


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