Orchid Avenue Pty Ltd v Hingston & Anor [2015] QSC 42 per McMurdo J

This case highlights the importance of buyers making their own enquiries when purchasing properties for reasons that relate to features external to the property, such as ocean views.

The first and second defendants, Mr and Mrs Hingston (Buyers), entered into a contract with the plaintiff (Seller) to purchase an apartment "off the plan" in the Hilton Surfers Paradise Hotel and Residences development (Hilton Development). The apartment was located on the 52nd floor and faced east towards the ocean. The agreed price for the apartment was $3.15 million.

The plan for the Hilton Development was registered in August 2011 and settlement became due on 8 September 2011. However, the Buyers refused to complete the contract.

The Seller claimed damages for breach of contract quantified by the contract price less the market value on termination of the contract, less the commission saved. Between when the contract was entered into and September 2011, the value of the apartment had fallen by $1.5 million.

The Buyers defended the Seller's claim on the basis that they were induced to enter into the contract because of misleading and deceptive conduct by the Seller in breach of the then section 52 of the Trade Practices Act 1974 (Cth), entitling them to effectively avoid completing the contract.

The Buyers asserted that representatives at the sales office for the Hilton Development made representations that the views of the ocean would be unobstructed by any other building and would be protected from being obstructed because the council would not approve a building that would obstruct those views.

The Buyers claimed that when the representations were made in March 2008, the views from the Hilton Development were unobstructed. However, by the time the settlement date came around, the "Soul" development had been constructed. The Soul development has 77 floors and is situated between the Hilton Development and the coastline, such that it obstructed the Buyers' view.

The Court was ultimately not satisfied that the representations were made by the Seller to the Buyers for the following reasons:

  1. construction of the Soul development had already commenced in February or March 2008, which was around the time the representations were allegedly made;
  2. it was publicly advertised that the Soul development would have 77 floors;
  3. Mr Hingston was an experienced property investor;
  4. Mr Hingston had seen the boarding around the Soul development site while it was being constructed;
  5. the existence of the Soul development and its proposed height was obvious;
  6. the locality of central Surfers Paradise made it unlikely that there would be a change in planning laws such that a nearby building could not be constructed to the height of the Hilton Development;
  7. there was, in fact, no such change in law; and
  8. the Buyers did not complain about the obstructed views until close to the due date for settlement, however, the height or likely height of the Soul development must have become obvious by at least 2010.

In light of the above, the Seller was successful in its claim. Damages were awarded to the Seller together with interest of over $300,000 and costs.

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