This article is from the Australian Property Journal archive
The dispute between the 12 buyers and Mirvac at its Yarra’s Edge Tower Five in Melbourne’s Docklands, was a step closer to trial following a directions hearing at the Federal Court yesterday.
In May last year, the 12 Chinese buyers of 10 apartments are seeking to rescind contracts worth more than $8 million because Mirvac’s 40-storey Tower 5 has not lived up to its marketing promise of “a shimmer-sheathed icon utterly unlike anything the city has ever experienced before”.
Instead of being gold – the colour of prosperity for Chinese people – they said the building is brown.
At the time, one of the buyers, Gary Chan said he was bitterly disappointed with the final result.
Chan said he paid a deposit for an apartment to live in after being told that the building would have a gold facade.
“I was told that the tower would be the only gold tower in the Docklands, would be an icon of Melbourne because of its gold colour, and that this would increase its value,” he added.
At yesterday’s directions hearing, Mirvac was granted discovery of documents into the personal finances of the 12 applicants.
Lawyers acting for the 12 buyers, Slater & Gordon partner Lisa Nichols said yesterday directions hearing was really an administrative exercise.
Nichols compared Mirvac’s discovery of documents into the personal finances of the 12 buyers as a Royal Commission.
Last month, Mirvac won its second victory against an “off-the-plan” buyer in another building, Tower 3 at Yarra’s Edge Docklands.
At the time, the legal decision was the test case for a string of legal battles between buyers and developers at Melbourne’s Docklands development.
In last months case, Mirvac took legal action against Joseph Peter La Rocca, after he sought to rescind the contract on the purchase of $960,000 apartment in Tower 3.
Justice Hargrave in the Victorian Supreme Court dismissed all counter-claims by La Rocca, including that Mirvac had engaged in misleading and deceptive conduct.
He also claimed that a Mirvac salesperson promised the apartment in Tower 3 at Yarra’s Edge would have uninterrupted views of Port Philip Bay, would double in value in five years and could be rented for $2000 per week.
La Rocca added that none of these promises have been met.
However, any hope of a legal victory for La Rocca was dashed when the Bracks Government in March 2004 move to close the loophole in the Domestic Building Contracts Act 1995 – which forbid deposits exceeding 5% of the purchase price.
The Brack Government amended the Domestic Building Contracts Act 1995, following the Victorian Civil and Administrative Tribunal’s decision to grant an interlocutory injunction against Mirvac from obtaining a deposit bond on a $950,000 apartment at Yarra’s Edge.
The existence of that loophole meant that thousands of “off-the-plan” sales contracts in Melbourne’s apartment market, including at the Docklands would become worthless.
By Nelson Yap
