The lack of pre-purchase due diligence was no defense in an off-the-plan purchase of a Surfers Paradise $16.85m penthouse, again highlighting the need for buyers to seek professional valuation and legal advice before signing the dotted line. It also serves as a warning to buyers waiting settlement in the reportedly over supplied Brisbane City unit markets, that they won’t simply be able to forgo their deposit and walk away from an agreed price that turns out to be way over market value.
A buyer who contracted to buy an off-the-plan buy of the “prestigious four-floor penthouse” atop Soul in April 2006 paying a $1.68m non-refundable deposit, claimed he only agreed to the $16.85 m price when the selling agent said that smaller penthouse at Jade had sold for $20 million and that the Q1 penthouse sold for $7.8m but had half the floor size of the Soul penthouse — both were untrue.
The buyer failed to complete settlement August 2012. In 2014 the developer elected to terminate the contract of sale and commence legal proceedings against the buyer claiming damages for breach of contract.
In the 15 January 2016 decision, Justice David Jackson said; “It is commercially illogical and inherently improbable that in deciding upon a $16.85 million purchase the defendant (sic buyer) would not have obtained such advice,” “…..because of reliance on the alleged representations made by the plaintiff’s sales consultant comprising comparisons with properties that the defendant did not know anything about. This is where the defendant’s story is incredible,”
The Court ordered the buyer to pay the developer more than $15.6m (incl interest and other charges) in addition to the $1.68m forfeited. So, with legal costs the buyer ends up circa $18.0m out of pocket and nothing to show for it.
Juniper Property Holdings No 15 P/L v Caltabiano (No 2)  QSC 005 Jackson J 15/01/2016