The loss in value arising from a Council issuing a defective limited planning and development certificate AND the loss in value caused by a falling market were some of issues arising from a buyer believing the property had industrial zoning when in fact it was rural but with a conditional approval for material change of use which permitted some forms of industrial development.
The Appellant (Geju Pty Ltd) purchased 10 hectares of land on the outskirts of Capella in central Qld June 2008 for $900,000. It claimed that it would not have purchased the land if the true position had been known and that it had been misled by a limited town planning certificate issued by Council.
The matter was further complicated by the fact that the planning certificate had also stated an incorrect property description which was not queried by a series of people who dealt with it, including the Council officer who was responsible for issuing the planning and development certificate, the chief executive officer of the Council who signed the relevant documents, the real estate agent, the solicitors who acted for both parties in the transaction, the surveyor, and the buyer itself, an experienced property participant.
The Court considered:
(a) Did the Council owe a duty of care to Geju in issuing the Certificate?
(b) If a duty was owed did the Council breach the duty?
(c) Was Geju contributorily negligent?
(d) Should there be an apportionment of liability between concurrent wrongdoers – namely the Council and the solicitors who acted for Geju on the purchase – and if so in what proportion?
(e) If a duty was owed and breached did that breach cause Geju loss? If so, what loss?
Council disputed it owed a duty to Geju given that the certificate was not issued to it, but to a third party some months earlier. The evidence was unclear as to exactly how the certificate came to be received by Geju.
The Court found that there would be two classes of people that would be particularly interested; those who own the land and those who might be interested in buying it.
From a legal perspective, the ruling highlighted the extent of the duty of care owed by a local government when issuing documents in response to a request for information.
The valuation evidence was considerable and widely varied, not only in (1) the differences in values of the property at the time of the purchase, but also (2) the subsequent fall in values in a weakening market.
The Court found that the real value of the land at the date of purchase was $525,000 not the $900,000 paid. It ordered damages of $1,127,205.50 for the difference between the price paid and the real value of the land as well as acquisition, holding and borrowing costs plus interest. This figure was later revised to $852,205.50 because the buyer had also settled the claim against their solicitors for $275,000.
Geju Pty Ltd v Central Highlands Regional Council (No. 2) Pty Ltd  QSC 279