Court Ruling on Off-the-Plan Sales: Royal Pines Projects v Brightman [2024] QCA 147

Court: Queensland Court of Appeal
Judgment Date: 25 July 2024
Judges: Dalton JA, Wilson J, Crowley J

Key Issues: Implied term of cooperation in contract, unreasonable delay, prevention principle, access for valuation in off-the-plan apartment sales.

Summary: The Queensland Court of Appeal upheld a decision that Royal Pines Projects Pty Ltd breached an implied contractual obligation to cooperate by delaying access for buyers’ valuations. The appellant’s delay hindered the buyers’ ability to secure finance within the 14-day settlement notice period. Invoking the prevention principle, the court found that the appellant could not benefit from this delay, dismissing the appeal and ordering costs against the appellant.

Background: The case involves Royal Pines Projects Pty Ltd (“the appellant”), a developer that sold units in an apartment block on the Gold Coast “off the plan” to multiple buyers, including the respondents. The contracts required the appellant to provide at least 14 days’ notice before settlement after registering the plan of subdivision. The buyers needed to access the units for valuation purposes to secure financing for settlement. However, the appellant delayed granting access, which resulted in a dispute over whether the appellant had breached an implied term of the contracts.

Legal Issues:

1. Implied Term of Cooperation: The primary issue was whether the appellant breached an implied term that required cooperation, allowing buyers to access the units for valuations within a reasonable time to secure finance.
2. Reasonableness of Delay: The court examined whether the appellant’s seven-day delay in granting access to the buyers was unreasonable and whether this delay denied the buyers the benefit of the contract.
3. Prevention Principle: The respondents argued that the appellant’s delay in granting access prevented them from being ready for settlement, invoking the prevention principle, which states that a party cannot benefit from its own breach.

Court’s Findings:

• The court found that there was an implied term in the contracts requiring the appellant to cooperate by granting timely access to the units for valuations.
• The appellant’s delay was deemed unreasonable, effectively breaching the implied term by denying the respondents the full 14 days to prepare for settlement.
• The court ruled in favor of the respondents, declaring that the appellant was not entitled to insist on the 16 July 2024 settlement date and issued an injunction restraining the appellant from terminating the contracts based on the buyers’ failure to settle on that date.

Key Points:

• Implied Term of Cooperation: The court upheld the existence of an implied term in the contract that required timely cooperation from the appellant.
• Unreasonable Delay: The appellant’s delay in granting access for valuations was found to be unreasonable and a breach of contract.
• Prevention Principle: The court applied the prevention principle, ruling that the appellant could not benefit from the delay it caused.
• Court Orders: The appeal was dismissed, and the appellant was ordered to bear the costs. The appellant was also restrained from terminating the contracts for the buyers’ inability to settle by 16 July 2024.

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How Aylward Game Solicitors Can Help:

Aylward Game Solicitors can assist developers and buyers in ensuring that contracts are meticulously drafted to prevent disputes like the one in Royal Pines Projects Pty Ltd v Brightman. We can:

• Contract Review and Drafting: Draft and review contracts to include clear terms that address potential issues like access for valuations and cooperation obligations, reducing the risk of litigation.
• Dispute Resolution: Provide expert advice and representation in contractual disputes, leveraging our experience in contract law to secure favorable outcomes.
• Legal Advice on Settlements: Offer guidance on settlement procedures and obligations, ensuring compliance with contractual terms and avoiding breaches.
• Litigation Support: Represent clients in court if disputes escalate, ensuring that all legal avenues are explored and rights are protected.

With our expertise, Aylward Game Solicitors can help you navigate complex legal issues and achieve the best possible outcomes in property transactions and disputes.