Visit Our
Family Law Site
Click Here
Sunset Clauses in Off-The-Plan Contracts: What the Chevron One Decision Means for Buyers and Developers
A recent Queensland Supreme Court decision has delivered a clear reminder that a sunset clause in an off-the-plan contract is not a free option for a developer to walk away simply because settlement has taken longer than expected. The decision stems from Malligan v Chevron Apartments Pty Ltd; Cantavenera v Chevron Apartments Pty Ltd [2026] […]
Sunset Clauses in Off-The-Plan Contracts: What the Chevron One Decision Means for Buyers and Developers
A recent Queensland Supreme Court decision has delivered a clear reminder that a sunset clause in an off-the-plan contract is not a free option for a developer to walk away simply because settlement has taken longer than expected.
The decision stems from Malligan v Chevron Apartments Pty Ltd; Cantavenera v Chevron Apartments Pty Ltd [2026] QSC 195, handed down by Justice Freeburn on 21 August 2026. The case concerned two off-the-plan apartment contracts for units in Chevron One, a 40-storey, 230-plus apartment tower on Chevron Island, on the Gold Coast, and it has significant implications for how sunset clauses are drafted and enforced across Queensland.
Below, we set out what happened, what the Court decided, and the practical steps buyers and developers should be taking now.
Get Ahead with Expert Legal Guidance
Trust Aylward Game Solicitors to Navigate Your Legal Challenges
A Quick Refresher: What Is a Sunset Clause?
A sunset clause is a term commonly found in off-the-plan contracts that fixes a date (the “Sunset Date”) by which a development is expected to be completed and settlement is expected to occur. Sunset clauses exist to protect buyers from being left in indefinite limbo if a project stalls — but they also typically allow either party, and sometimes only the developer, to terminate if that date passes without settlement.
Until now, developers have often treated a passed Sunset Date as effectively automatic grounds to terminate. This decision confirms that is not always the case, and that the precise wording of the clause is critical.
What Happened in the Chevron One Case
In 2021, Chevron Apartments Pty Ltd, the developer of Chevron One, entered into off-the-plan contracts with two sets of buyers:
- Linda Malligan, who agreed to buy Unit 703 for $760,000 (contract dated 19 May 2021); and
- Claudio Cantavenera and Maria Salonia, who agreed to buy Unit 1305 for $840,000 (contract dated 7 April 2021).
Each contract fixed a Sunset Date five years after signing — 19 May 2026 and 7 April 2026 respectively. When those dates passed without settlement, Chevron moved quickly to terminate both contracts (on 22 May 2026 and 21 April 2026), relying on the sunset clause at clause 10.2.
Both sets of buyers challenged the termination. Given significant increases in Gold Coast apartment prices since 2021, the buyers had a strong incentive to hold Chevron to the original contracts rather than be forced to re-purchase at current market values.
What the Court Decided
The dispute turned on the wording of clause 10.2, which relevantly provided that Chevron “must establish the Scheme, register the Plan and effect Settlement” under the contract by the Sunset Date.
Justice Freeburn found the word “must” was deliberate and unambiguous, imposing a positive obligation on the developer to actually bring about settlement by the Sunset Date, rather than simply describing a cut-off point after which either party could walk away. Applying the standard objective test of what meaning a reasonable business person would give the clause, the Court held that because the wording was unambiguous, evidence of surrounding circumstances could not be used to displace its plain meaning.
This reasoning reflects a long-standing principle recognised by the Queensland Court of Appeal in Hope Island Resort Holdings Pty Ltd v Jefferson Properties (Qld) Pty Ltd [2005] QCA 315: unless a contract clearly provides otherwise, courts will presume the parties did not intend for one party to gain an advantage through its own failure to perform its obligations. On that basis, the Court held Chevron could not rely on its own delay in completing the development to then terminate and resell the units at higher prices.
Both contracts were held to remain on foot, at their original 2021 contract prices.
Get Ahead with Expert Legal Guidance
Trust Aylward Game Solicitors to Navigate Your Legal Challenges
Why This Matters Now
Although this decision concerns a specific development and specific contract wording, its implications are immediate and practical for anyone involved in an off-the-plan transaction in Queensland.
For buyers, it is a reminder that a sunset clause termination notice is not necessarily the end of the road. Whether a developer can validly terminate depends heavily on the specific twording of the contract, the termination rights it expressly reserves, the conduct of the parties, and the legislation applicable to the sale.
For developers, the decision is a signal that Queensland courts will scrutinise sunset clauses closely, and that ambiguous or loosely drafted clauses may be construed against the party seeking to rely on them. A single word can determine whether a termination is valid or whether a multi-million dollar contract remains binding.
Importantly, this decision does not establish a blanket rule preventing developers from ever terminating a delayed off-the-plan contract. The outcome will always depend on the wording of the individual contract, read as a whole.
What Buyers and Developers Should Be Doing Now
We encourage buyers and developers alike to treat this decision as a prompt to review their position now, rather than waiting until a dispute arises. In practical terms, this means:
- Buyers who receive a sunset clause termination notice should not assume the contract is automatically at an end, and should not sign anything or accept a refund before having the contract and notice reviewed.
- Buyers should obtain urgent advice on whether the specific wording of their contract imposes a positive obligation on the developer, and whether the developer’s own conduct contributed to the delay.
- Developers should review their standard off-the-plan contract precedents, particularly the drafting of sunset and termination clauses, in light of this decision.
- Developers should ensure any decision to terminate under a sunset clause is properly assessed against the full contract, including any clauses that separately preserve termination rights, before a notice is issued.
- Both parties should keep clear records of correspondence and conduct throughout the life of the contract, as this may become relevant if a dispute over termination arises.
Taking these steps now, rather than after a notice has been issued or a dispute has escalated, will put both buyers and developers in a stronger position to protect their interests.
Get Ahead with Expert Legal Guidance
Trust Aylward Game Solicitors to Navigate Your Legal Challenges
How Aylward Game Solicitors Can Assist
Sunset clause disputes can move quickly, and the financial stakes for both buyers and developers are often significant. The team at Aylward Game Solicitors can assist buyers and developers to:
- review off-the-plan contracts and sunset clause wording to assess termination rights and obligations;
- advise buyers who have received a sunset clause termination notice on their options, including challenging the termination;
- assist developers to review and update their standard contract precedents in light of this decision; and
- act in negotiations or litigation arising from a disputed termination.
If you would like assistance reviewing an off-the-plan contract or responding to a sunset clause termination notice, please contact our office to arrange a consultation.
Was this article helpful?
YesNo
SHARE THIS