Background
Chevron Apartments Pty Ltd sold proposed apartments in its Chevron One Gold Coast development under off-the-plan contracts in 2021. Linda Malligan agreed to buy unit 703 for $760,000, while Claudio Cantavenera and Maria Salonia agreed to buy unit 1305 for $840,000.
Each contract required Chevron, subject to specified qualifications, to establish the community title scheme, register the plan and complete settlement by a defined “Sunset Date.” After those dates passed without settlement, Chevron purported to terminate the contracts, relying on a contractual reciprocal right to terminate during a period in which buyers could terminate under the Body Corporate and Community Management Act 1997 (Qld).
The Court’s Holding
Freeburn J declared both contracts valid and binding. Clause 10.2 had one clear meaning: Chevron “must” establish the scheme, register the plan and effect settlement by the Sunset Date, subject to Chevron’s express termination rights under clause 16 and the buyers meeting their payment obligations.
Chevron could not rely on the reciprocal statutory-termination clause to benefit from its own breach of that obligation. The court rejected Chevron’s arguments that the obligation should be read down, that settlement preconditions meant no obligation had arisen, or that other contractual termination rights applied. It also rejected Chevron’s reliance on alleged disclosure-statement changes: the buyers were not materially prejudiced within the meaning of s 214 of the Act.
Key Takeaways
- Clear contractual language requiring a developer to complete an off-the-plan project and settlement by a sunset date will be enforced according to its ordinary meaning.
- A developer cannot ordinarily use a termination right triggered by its own failure to perform, absent a clear contractual provision permitting that result.
- Increased body corporate levies and possible temporary construction impacts did not establish material prejudice under s 214 on the evidence.
Why It Matters
The decision reinforces that sunset-date mechanisms in off-the-plan contracts must be read alongside the developer’s express contractual obligations. Broad rights to abandon an unviable development may remain available where expressly provided, but they did not permit Chevron to terminate after failing to meet its own settlement obligation.
For developers and purchasers, the case underscores the importance of precise drafting where a seller seeks a right to terminate after a sunset date has passed.