Property Developer Charged with Misleading and Deceptive Conduct

The recent case of Eckford v Six Mile Creek Pty Ltd (No 2) [2019] FCA 1307 involved a property developer (SMC) who made representations to an interested buyer (‘Eckford’) that a lot for sale would have ‘Ocean Views Forever’. This was due to the fact that the apparent ‘sold’ adjacent lots had height restrictions. In 2007, Eckford entered into a contract to purchase the lot for sale for approximately $895,000, with the contract stipulating that the height restrictions of the adjoining lots were to bind their owners ‘forever’. However, the unconditional contracts on the adjacent lots were later terminated, and eventually sold without the height restrictions. Eckford subsequently claimed that SMC and its director had engaged in misleading or deceptive conduct, and had contravened s52(1) of the Trade Practices Act 1974 (Cth) (now s18 of the Competition and Consumer Act 2010).  At trial, the Court held that Eckford was attracted to the lot by its views and the promise of their protection, with the purchase price being paid on reliance of the developer’s representations. The Court determined that SMC induced entry into the contract by engaging in conduct that was misleading & deceptive, making false and misleading representations. The Court awarded Eckford damages in the sum of $2,573,354.46 to be paid by SMC and its director. This case provides a warning to property developers and real estate agents, who should ensure that potential purchasers are informed of any material changes to a property that is subject to purchase negotiations.

Leave a Reply

%d bloggers like this: