A Gold Coast couple promised “exclusive penthouse views from Surfers Paradise to Burleigh” were devastated when their $1.6 million “Bella Vue” apartment was discovered to become crowded out by another edifice in the “master-planned” Emerald Lakes development.

Neither a 3-D concept model nor a computer-generated DVD “flyover” presentation revealed any hint of a further 11 story residential tower for which the developer Nifsan, had sought construction approval from the Gold Coast City Council three months before the buyers signed up in February 2008.

As was its practice, Nifsan management withheld such information from its sales staff and it wasn’t until 9 months later on a further visit to the sales office, the buyers noticed an alteration to the 3-D model with the interposition of the high-rise structure that would clearly interfere with their “uninterrupted views over the lake to the horizon”.

Stonewalled by the developer and alarmed that the promised panorama would yield mere “view corridors” – not to mention the prospect of “other buildings looking back in” and the need for curtains of which they had already expressed their disdain – the buyers consulted lawyers who uncovered the pending application for the offending structure.

Nifsan made it clear they would not preserve the promised views and privacy for the 9th floor penthouse and disputed their liability for the inflated outlook claims. The buyers terminated due to misrepresentation and demanded return of their $80,000 cash deposit.

The court accepted that the agent had acted entirely honestly with no knowledge of his higher-ups’ betrayal but this could not acquit adverse developer conduct.

The couple – Mr Buskey was also himself a real estate agent  – were held to be honest and reliable with “generally good” recollection of the disingenuous dialogue.

Having proved the representation, his honour was satisfied a TPA s 52 breach had been made out: the further high-rise application created “a real, as distinct from a remote, possibility that the building would be constructed” and because Nissan “did not have reasonable grounds to make [the statements], they are taken to be misleading.”

The contractual provision excluding any “warranty as to the final type, nature and composition of the property is comprised” in the project was held not to excuse the making of pre-contractual representations.

That by contract the buyers also acknowledged they relied upon their own judgement and not on any agent statements was, explained his honour, “a factor which is taken into account in deciding the factual issue of reliance”, it was not of itself an antidote to the developer’s transgressions. Ultimately his honour was satisfied the requisite reliance had been made out and the buyers were entitled to relief under TPA s87.

Nifsan failed in its bid to enforce specific performance of the contract and were ordered to repay the deposit with interest and costs.

This is the third in line of recent decisions supporting buyers’ rights to terminate contracts on the basis of inflated claims about as-constructed views.

Bella Vue and a sister building “Porto Bellago”, were located in the Emerald Lakes “French Quarter” named Porto Grande. The taxonomy, if not of itself misleading, is certainly vertiginous. With great public interest in development assessment outcomes, one wonders how such ludicrous lexicon could have slipped by any diligent planning process.

Bella Vue indeed!

Nifsan Developments Pty Ltd v Buskey & Anor [2011] QSC 314 Applegarth J 27/10/2011

 

 


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