Take the law… Carter Capner Law's Queensland law digest

Two attempts by buyers to crash their 2007 off-the-plan apartment purchases at Mirvac’s Tennyson Reach development were dashed by the Supreme Court last week.

Both centered on the substantial difference between actual view enjoyed from the project display centre and that which could be had from the to-be-constructed units.  Both involved differing recollections of statements made by sales agents concerning mangroves between the development and the river. Both contracts were at prices substantially higher than 2010 values.

Mirvac, in separate actions, sued to compel the buyers to settle their respective contracts. The buyers resisted on the basis of alleged misleading and deceptive conduct that they claimed entitled termination.

The buyers alleged – more or less identically in each case – that the sales persons stated that the views from the apartments would be similar to those at the display centre and that this would be achieved by trimming the mangroves. The buyers’ cases were that, had they been aware of the true facts – that the river views would be substantially obstructed – they would not have gone ahead.

At both court hearings, the sales agents and the buyers had – quite understandably according to the court – imperfect recollections of exactly what was said.

However for a number of reasons, the court found that the buyers’ recollections were “unreliable” and that the sales agents’ versions of events should be preferred.

Mirvac’s trump card was its training manual which documented that mangroves would be “selectively trimmed” and would be subject to “an ongoing program of mangrove management”. The manual also stated that Mirvac anticipated that the “mangrove canopy will filter views”.

These statements all proved correct but as it turned out, the mangrove trimming did not occur in front of either of the subject two units.

Because the salesperson’s evidence in each case coincided with what was contained in the training manual this was according to the court, “relevant as an indicator of what it is likely to have been said”.

The consistency between the sales manual and the salesperson’s evidence and the simplicity that this conveyed was in contrast to the more prolific and variable claims of the buyers that suggested some confusion on their part.

The buyers were ordered to complete their settlements and to pay the developer’s legal costs.

These examples illustrate how important effective processes, documentation and training can be to the integrity of a sales project. It is very likely that the absence of the manual and evidence consistent with it would have produced the opposite result.

Mirvac Queensland Pty Ltd v Holland [2010] QSC 330; Mirvac Queensland Pty Ltd v Tyan Pty Ltd [2010] QSC 333

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