The well-known property developer Mirvac has failed to get special leave to appeal to the High Court of Australia against a Queensland Court of Appeal decision which allowed a buyer to rescind a contract to buy a multi-million dollar unit made uninhabitable by the January 2011 Brisbane floods.
That failure brought to a close the final chapter in a long, brawling legal saga.
In July 2007 Mrs Dunworth, the wife of former Wallaby footballer David Dunworth, agreed to buy a $2.155 million unit in a residential complex to be constructed beside the new Tennyson tennis centre, in Brisbane’s inner suburbs. Mrs Dunworth later refused to settle the contract, citing flood levels (based on the 1974 floods) that would impact upon her unit if she bought; this phase of the litigation pre-dated the 2011 floods. She was ordered to specifically perform the Contract and complete the settlement on 8 February 2011.
However, before that completion date, the finished unit was flooded in January 2011 – before the unit would be habitable, it was necessary to remove gyprock sheeting from the walls and to disconnect the electrical wiring and appliances to the unit. Mirvac needed four months to complete the restoration work, which it offered on January 24 2011 to carry out.
Mrs Dunworth however rejected the offer to restore the unit, and on January 28 purported to rescind the contract on the grounds that the unit had been rendered unfit for occupation. Her position relied on a seldom used section of the Property Law Act (“PLA”) that requires a property to be habitable at the date of completion (i.e. on 8 February 2011).
This further dispute (seen as a test case on the use of section 64 of the PLA) went to the Supreme Court in February 2011, when a judge found against Mrs Dunworth and allowed Mirvac until June to complete the restoration work.
Mrs Dunworth then appealed that decision. In a unanimous judgment, the Court of Appeal:
- upheld the appeal,
- set aside the Supreme Court orders,
- declared she had validly rescinded her contract with Mirvac on January 28, and
- awarded costs to Mrs Dunworth.
The only and last option available to Mirvac was to seek “special leave” to appeal to the High Court of Australia. But last Friday the High Court refused the application, bringing this long running case to a final close.