29/03/11 Article 1101 - Buying and Selling Property
Warning Statements, Cooling Off Period, Property Agents and Motor Dealers Act
A costly dispute: Businessman failed to show he validly terminated an $8.5 million purchase contract for a Gold Coast Q1 penthouse.
The Court of Appeal in Brisbane recently affirmed the decision of a Supreme Court judge that businessman Brian Fletcher had not been entitled to terminate a contract on the luxury Gold Coast Q1 apartment.
In the 2011 decision of Fletcher v Kakemoto the court undertook a detailed examination as to whether a prospective purchaser is required to sign a new warning statement, or re-sign the original warning statement on each occasion where changes are made to a proposed contract before it is submitted to a vendor.
In April 2007, Brian Fletcher made an offer to buy the 74th floor Q1 penthouse for $8.5 million to Japanese restaurateur Akeo Kakemoto. The offer was accepted and due to a pending auction Mr Fletcher agreed to waive the usual cooling-off period and paid a deposit of $850,000 with full settlement to be completed on or before nine months from the contract date. Mr Fletcher signed the industry-standard warning statement, outlining cooling-off periods and the importance of obtaining independent valuation and legal advice.
In January 2008, Mr Fletcher attempted to terminate the contract. He claimed he was entitled to do so under s 367 Property Agents and Motor Dealers Act 2000 (Qld) due to non-compliance with s 366B(4) and s 366D(3), contained in Ch 11 (Residential Property Sales) of that Act. This related to the failure to give him a second warning and allow him to re-sign the warning statement when the amendments were made to the contract.
The case was initially heard in the Supreme Court in 2010 where the trial judge found the contract at the time of the buyer’s amendments to the special conditions was to be regarded as the same contract at inception. As such, no new requirement under s 366B to sign the warning statement arose and he was not entitled to terminate the contract. Mr Fletcher appealed that decision.
The judges of the Court of Appeal unanimously dismissed his appeal and ordered Mr Fletcher to pay court costs incurred by respondents.
Fletcher v Kakemoto and Anor [2011] QCA 46
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