A buyer who managed to get a development site under contract with a 12 month settlement, secured only by a “small deposit”, has defended a specific performance lawsuit on the basis “there was no way he could raise $1.2 million purchase price”.

The buyer signed up the site in September 2012 and obtained a development approval for a 54 room hotel.

When the settlement date came and went 12 months later, sellers John and Alison Evans demanded performance.

After the buyers failed to complete on any of the several further opportunities given to them to do so, they filed proceedings in Brisbane’s Supreme Court.

Funds “expected to materialise from other development projects have not become available,” Scott swore. His company had no assets and he was in the same position but with five children to support.

He also gave testimony that he had tried to resell the land and to raise funds by prospectus, both of which proved unsuccessful.

Justice Peter Lyons referred to similar rulings where “if there was no source from which the purchaser could reasonably obtain the funds necessary to settle”, specific performance should be refused.

It noted similar outcomes when a specific performance order would “cause disproportionate hardship so as to give rise to injustice”.

In this instance, the court refused summary judgement for specific performance and the matter will eventually go to trial when at the very least – subject to any further defences being raised – the seller is likely to recover an order for damages arising from the purchaser’s failure to complete.

Evans & Anor v Robcorp Pty Ltd & Anor [2014] QSC 026 Peter Lyons J 13/02/2014


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