Xue v Karimbla Properties (No.45) Pty Ltd  NSWSC 552 is another recent example of a misleading and deceptive claim in the context of an off the plan apartment sale contract.
The case demonstrates yet again the importance for developers of keeping written records of discussions with buyers as to their standard processes and procedures. Whilst the developer was successful in defending the claim, both parties relied heavily on oral evidence and the case ultimately turned on the credibility of the witnesses.
The buyer alleged that the seller (part of the Meriton Group) (Meriton) had, through its selling agent, engaged in misleading and deceptive conduct in contravention of the Australian Consumer Law.
The buyer alleged that it had entered into an off the plan contract to purchase an apartment from Meriton based on oral representations that vendor finance at “market interest rates” would be available to the buyer. This was despite the fact that the parties had struck out the vendor finance option within the sale contract.
Shortly before settlement, the buyer made inquiries with Meriton regarding vendor finance options and was offered a vendor finance at a 6% interest rate. The buyer rejected the offer on the basis that this was above the market rate. The contract was ultimately terminated by Meriton when the buyer failed to settle.
The selling agent gave evidence that:
Justice Henry ultimately accepted the selling agent’s account of events and found that the selling agent did not make any representation that vendor finance at a market interest rate would be available to the buyer at any time.
Faced with two very different account of events and in the absence of contemporaneous file notes, Justice Henry came to this conclusion on the following basis:
This case highlights the importance of keeping contemporaneous file notes to record meetings with buyers and any representations made. In the absence of written records, the court will largely need to rely on the credibility of the witnesses. This is particularly important for off the plan sales where disputes often arise at project completion which occurs many years after the sale contract has been negotiated.
Developers should also utilise sales manuals which instruct the selling agent on how to respond to specific queries. This serves two purposes:
Any information on the developer and selling agent’s websites and other product material should also be regularly monitored for consistency.
*Acknowledgement: Andrew Freeman made a significant contribution in the preparation of this article.