Agent Developer & Investor


Are Rent to Buy deals dead? Owners must repay buyer’s improvement costs and excessive deposit

The marketeer guaranteed to cover the owners’ mortgage payments and other outgoings in exchange for a long-term option to

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Contract crashed on incomplete DA works, seller saved by interim occupancy certificate

It is not uncommon for residential sales contracts to require the seller to complete specified works or obtain a local authority

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Agency gets buyer on paper, trumped on commission claim by competitor’s closing “skill set”

A Gold Coast real estate agency who recruited the buyer for a Benowa mansion has been denied commission for a sale that went ahead

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Anatomy of a subdivision: Developer’s role reversal forces profit payment from lender

A seasoned civil works contractor keen to develop a major Lockyer Valley subdivision enlisted the support of an enthusiastic private lender.

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Agent forfeits deposit & “seizes” $20k comm; rapped for “self-interest” actions

A Sunnybank real estate office that paid commission to itself from a trust account deposit it had refused to refund to a buyer

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Flour Mill Developer Caught By Plummeting High-Rise Values

A developer who defaulted on the purchase of a $25m condominium project at the historic Albion Flour Mill site has been ordered to pay the vendor millions in compensation for the collapsed deal.

Fridcorp Group – operated by developers Paul Fridman and Chris Roche – signed up to buy the 12 lot FKP site in July 2015.

The company’s $400m “Odyssey” development was to consist of two 20-storey buildings totalling 634 residential units.

Council approval was received in August 2016, but in December the deal was pulled.

Fridcorp alleged FKP failed to disclose all required information, which, by their claim, breached statutory environmental protection rules.

But all necessary reports were available via a virtual “data room” that both parties had access to prior to signing the contract.

FKP sued in Brisbane’s Supreme Court for the difference between the sale price and the site’s diminished value as at the due date for settlement.

Justice David Jackson had no difficulty in ruling that notice had been duly given, because Fridcorp had specifically consented to documents being disclosed by way of the mutually accessible “data room”.

Justice Jackson said the use of the online platform satisfied all legal requirements and dismissed Fridcorp’s attempts to justify its withdrawal from the deal.

It was irrelevant, he reasoned, that the requisite contamination notice was one of scores of documents deposited into the data room because it was clearly titled and easily available.

Valuer Troy Linnane, head of residential development at Jones Lang LaSalle, argued by comparison with other developments in Bowen Hills and Newstead that the site’s value in December 2016 had dropped from $25m to $17m.

He then reasoned that by March 2017 the value had collapsed further to $15.75m.

Justice Jackson thought that to be too much of a stretch as such a conclusion was “unsatisfactory” and “inconsistent”.

There were also unresolved questions as to why the valuer rated an inferior comparison site at a far higher dollar rate per square metre than the Albion Mills site.

That said, the value drop to $17m was taken as reasonable conclusion, yielding a value collapse over just 18 months of $8m or 32%.

Given that a deposit of $2.75m had already been paid, the Fridcorp Group was ordered to pay $5.25m plus interest – a total of $5.46m – for what was ruled to be a serious contract breach.

For more details on the case, visit:

FKP Commercial Developments Pty Ltd v Albion Mill FCP Pty Ltd & Anor [2017] QSC 322


Punctuation mark invalidates personal guarantee

Credit account applications commonly contain – in the case of companies – a director’s guarantee.

Frequently the guarantee is in the form of a very brief “add-on” that holds the signer liable as guarantor, if they happen to be a director or shareholder.

Such was the case of a western NSW landscaping company whose truncated version simply stated “if I am a director/shareholder (owning at least 15% of the shares) of the customer, I shall be personally liable for the performance of the customer’s obligations under this contract”.

Paul Twyman was indeed a director of Aquawest’s customer Chatoyer Pty Ltd but it could not be shown his holding exceeded 15% or more of its shares.

After a series of part payments of its debt – the last one being in February 2014 – $55k remained owing to Aquawest. In May 2014 Chatoyer went into liquidation.

The supplier sued Twyman under the guarantee.

For information go to: Contract Disputes

When the matter first came before the court, the presiding magistrate ruled “I cannot be satisfied that Twyman signed the document intending to be bound as guarantor. There was no separate signing provisions and they could have been signing simply as someone accepting the terms and conditions.”

Twyman’s escape from the guarantee was affirmed on appeal to the Supreme Court of NSW.

It observed a forward slash is not a word but a form of punctuation that may be injunctive or disjunctive.

In this instance the phrase was capable of requiring the signer – to attract guarantor liability – to be both director and shareholder; or it may have intended to create such liability if the signer was either a director or a shareholder. Thirdly it was capable of referring to a signing director and/or shareholder, ie a person who is one or the other or both.

The phrase was thus “truly ambiguous” and was therefore void. Further, in a guarantee, it had to be construed strictly and contra proferentum such that Twyman could only be liable if he were proven to be a director and shareholder with at least 15% of the customer’s shares.

Thus according to multiple conclusions, Mr Twynam thus escaped liability under the purported personal guarantee.

Aquawest v Twynham Pty Ltd [2017 NSWSC 652, Lonergan J, 25 May 2017


Informal commercial lease format opens up battle on permitted use and rent

A landlord specified the permitted use for an auto repair premises at Moss Street, Slacks Creek as “storage” to better suit his insurance requirements, claimed tenants who also argued their agreed rent was $2.9k per annum.

Three months after Nicholas Rigney and Matthew Mahment signed on for their three-year sublease in December 2016, they notice the lessor to them was not the registered owner of the property. They requested a copy of the head lease.

They also sought clarification of the disparity between the very favourable rent specified in the Commercial Tenancy Agreement they signed and the $2.9k/month figure stated in an “agreement to lease” that was annexed to it.

For information regarding contracts, go to: Contract Disputes

When the head lease was not produced, they stopped all further rent payments claiming a substantial credit because the annual rent had previously been paid each month.

The lessor issued a notice to remedy breach of covenant and purported to terminate and changed the locks to the premises.

That brought the tenants before Justice Susan Brown in the Supreme Court in Brisbane on an application for relief against forfeiture and for orders against the landlords to cease unlawful entry to the premises.

The tenants’ claim against the landlord’s solicitors for having prepared and served the default notice – said to have been based upon a breach of the Australian Solicitors Conduct Rules and the Legal Profession Act – was the struck out on the basis that neither provided any cause of action upon which the tenants could rely.

The court decided that for determination of the correct rent and the permitted use, a trial was required.

In the meantime it ordered the status quo be preserved by allowing the tenant back into the premises provided they pay rent at the stated sum each month.

Rigney & Anor v  Absolute Automotive Solutions Pty Ltd [2017] QSC 124, Brown J, 20 June 2017


Neighbour stops development over crane boom airspace trespass

Construction of an inner-city apartment development has been brought to a standstill afteran injunction was granted preventing a tower crane from oversailing the home of adjacent occupiers.

Hadyn Janney and Carol Foti voiced their safety concerns to developer Steller Pty Ltd immediately on receipt of its notification the crane would be operational for at least half of the 12 month project period.

They asked the developer of the four-storey complex to move them at its expense to alternative housing. Too expensive cried Steller, which countered a $3k airspace use licence fee offer.

In its view, because it would ensure the jib would only traverse the neighbouring Elwood residence empty of load, any interference to their airspace rights would be trivial.

Because though it proposed that out of construction hours, the boom be allowed to swing or “weathervane” according to the prevailing wind direction – to avoid wind stress on the crane’s gears and the tower frame – the family faced the prospect of the boom sitting atop their home overnight and on weekends.

They appointed lawyers to seek an injunction in Victoria’s Supreme Court which prompted the 27 unit developer to belatedly come up with $20k towards the rental and removal costs Hadyn and Carol had first asked for.

By now though, their demand had escalated to more than $100k and the dispute headed into court.

Steller contended before Justice Peter Riordan that “the common law should now recognise the practical reality of the need for cranes in commercial construction” and that the balance of convenience was markedly in its favour.

The court took a much different view. According to the judge, airspace trespass was neither a trifling nor a “de minimus” interruption of a landowner’s rights and created a strong prima facie entitlement to an injunction.

“Owners of property should not have to live with the fear that at any time the boom of the crane may be above their home,” observed the court “and the risk (however small) that it may crash down on their family”.

Neither did his honour consider the encroachment to be of trivial financial value that could be adequately compensated by a small monetary payment.

The judge refused to determine the appropriate compensation, preferring to leave that to the parties. He noted though that the licence sought may well have “precisely the value the power of veto upon its use creates,” clearly indicating that the $100k sum asked for by the adjoining owners was not unreasonable.

In Queensland and New South Wales the situation is slightly different. Developers may apply to the court for a statutory airspace licence for upon the payment of reasonable compensation determined by the court.

Even in those states, this judgement is a useful and relevant guide for owners who wish to argue the compensation payable by developers should far exceed nominal sums that are often offered.

Janney & Ors v Stellar Works Pty Ltd [2017] VSC 363, Riordan J, 9 June 2017


EFT deposit due “on signing” hits account the next day. Can seller terminate?

It didn’t take long for the Red Rock Realty agent to get her seller’s signature on the buyers’ offer.
An email to buyers Joshua Long and Vanessa Wilson followed shortly after with a copy of the contract at around 2 pm.

The reference schedule for the Springwood sale amended the usual requirement for payment of the deposit from “on the day the buyers sign” to “on acceptance” of the contract.

With that in mind, Vanessa notified their solicitor to transfer the deposit to the agent’s trust account that day.
That occurred at 8:30 pm but the funds did not land into Red Rock’s trust account until the following day.

It was uncontroversial that the contract was formed once acceptance had been communicated to the buyer.
And because Red Rock had cautioned that if a deposit was to be paid by Internet banking or credit card, payment should precede the due payment time by 48 hrs, the seller contended it had not been paid as required, thereby entitling the seller to terminate.

On the other hand, Wilson and Long argued they should be entitled to specific performance of the contract that seller Milize Hijazi had repudiated by way of wrongful termination.

For information regarding contracts, go to: Contract Disputes

Judge Julie Dick in Brisbane’s District Court agreed. She noted the contract did not require the deposit to be paid contemporaneously with acceptance. Neither was there any specification for payment “by close of business” or within “banking hours”.

She had no difficulty in holding that there was no failure to pay the deposit by the due date and thus specific performance of the contract should be allowed.

The seller also argued she had been pressured into the sale without any legal advice or the opportunity to consult family. That argument gained no traction given that the Form 6 Appointment stated in clear terms that “the client is advised to seek independent legal advice before signing this form”.

In any event within 7 days of her purported termination, her solicitors notified the buyers that “she agrees that contract was still on foot and withdraws her termination”.

Thus if she were wrong as regards the validity of the deposit payment’s timing, Judge Dick reasoned the purported termination had been clearly and unambiguously withdrawn and therefore the contract had been validly reinstated.

It would therefore be unconscionable, she ruled, to allow the seller to rely upon any earlier breach by the buyer to avoid the contract.

Long and Wilson succeeded in their application that they be entitled to finalise their purchase of the property.

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