Off the plan contracts – what can go wrong

Off the plan contracts – what can go wrong

A recent decision in the Queensland Supreme Court has put into stark focus the potential risks to buyers of properties off the plan who fail to settle.

In Juniper Property Holdings No 15 P/L v Caltabiano (No 2) [2016] QSC 5, the Supreme Court ordered the buyer:

  • forfeit to the seller the deposit of $1.6 million (plus interest);
  • pay damages and interest of over $14 million; and
  • pay costs

after the buyer failed to settle an off the plan purchase of the penthouse in the Soul development at Surfers Paradise.

While this is an extreme example of the potential cost to a buyer who fails to complete, it is a timely reminder of what can go wrong when values fall between the contract date and settlement.


In 2006 the defendant entered into an off the plan contract for the purchase of the penthouse in the Soul development at a price of $16.85 million with a deposit of $1,683,000.00.

The development was completed in 2012, with a settlement date notified for 10 August 2012. The defendant sought and obtained an extension of time for settlement to 10 September 2012, with time to remain of the essence.

The defendant failed to attend settlement, and further notices to complete were issued between September 2012 and March 2014, with the defendant failing to pay the purchase price as required.

In March 2014, after the defendant failed to attend at the time and place nominated for settlement, the plaintiff elected to terminate the contract for breach, declared the deposit forfeited and reserved its rights otherwise.

In June 2014, the plaintiff commenced the claim against the defendant in damages for breach of contract.

In July 2014 the defendant purported to rescind the contract for alleged misleading and deceptive conduct by an employee/agent of the plaintiff during pre-contractual negotiations, and filed a counterclaim against the plaintiff for the return of the deposit and damages under the Trade Practices Act 1974 (Cth).

Alleged representations

The defendant claimed the that an employee/agent of the plaintiff had made a number of representations that $16.85 million was a reasonable purchase price. The alleged representations were:

  • The penthouse in a nearby beachfront development (Jade) had been sold for $20 million;
  • The Soul penthouse was better than the Jade penthouse, as the Jade penthouse was of a similar size but only 15 stories high and flanked by two buildings that impacted on the view;
  • The penthouse in the Q1 complex was sold in 2002 for $7.8 million and was half the floor size of the Soul penthouse.

The defendant alleged the representations were false because:

  • the Jade penthouse had not been sold, either for $20 million or at all; and
  • the Q1 penthouse was not half the floor size of the Soul penthouse.

The plaintiff denied that the representations were made at all.

The defendant gave evidence that but for the alleged representations he would not have entered into the contract to purchase the Soul penthouse.


The Supreme Court concluded that the defendant did not rely on the alleged representations, and dismissed the defendant’s counterclaim.

Justice David Jackson found that “it is commercially illogical and inherently improbable that in deciding upon a $16.85 million purchase the defendant would not have obtained (external advice as to the value of the Soul penthouse) because of reliance on the alleged misrepresentations 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”.


When considering entering into a purchase off the plan, you should ensure that you obtain appropriate and independent legal, financial and valuation advice prior to entering into the contract.

The Ballantyne Law Group is well placed to assist in relation to all aspects of property law – please contact us now on (07) 5606 7332 to speak to us.

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Sidnee Jennings


Kathy Rundle

Special Counsel