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02 March 2010

“Ocean glimpses” not enough to satisfy buyer’s condition

On 26 February 2010 the Supreme Court of Queensland handed down a decision which illustrates the importance of carefully drafting special conditions in property contracts.

On 26 February 2010 the Supreme Court of Queensland handed down a decision which illustrates the importance of carefully drafting special conditions in property contracts.

The case of Gilson v Flamingo Enterprises Pty Ltd [2010] QSC 53 involved a situation where Gilson agreed to buy an off the plan unit from Flamingo Enterprises Pty Ltd.

In discussions with the selling agent before signing the contract, Gilson raised with the selling agent a number of queries including whether a particular unit had “unobstructed ocean views”.

The selling agent invited Gilson to suggest special conditions to be included in the contract which would satisfy her queries.

The developer subsequently agreed to include the following special condition in the contract:

The positioning of the unit must provide unobstructed ocean views.

After construction of the unit, Gilson claimed the unit did not have “unobstructed ocean views”. She made an application to the Supreme Court seeking orders that she was entitled to terminate the contract on the basis of the special condition.

In interpreting the words “unobstructed ocean views” Justice Daubney stated:

… The clear meaning of the clause is that, when constructed, one would have “unobstructed ocean views” from the unit. That does not necessarily mean that one would have panoramic views of the ocean from every point within the unit. Such an interpretation would, in my view, be quite unreasonable. But the term “unobstructed ocean views” means more that one would have selected aspects of the ocean, depending on the direction in which one looks. The use of the word “views” tends to suggest a wider range of vision than a single aspect. Those views must be of the ocean and not merely particular visual slices of the ocean, or the sky above the ocean and those views of the ocean must be “unobstructed”. That word really speaks for itself.

Before deciding the case, Justice Daubney attended at the unit complex to personally observe the views. The judge found that one could see the ocean if one stood on the balcony and looked due east. However, the view from north east was completely obstructed by buildings. He found that the view from the south east quarter was significantly obstructed by a roof of the neighbouring apartment block, and that it provided, at best, “ocean glimpses”.

The judge concluded it could not be objectively stated that one had “unobstructed ocean views” from the unit and therefore the developer had breached the special condition.

The court also found that the special condition was an essential term of the contract having regard to the dealings between the parties which lead to its inclusion. This meant that Gilson was entitled to terminate.

Property developers need to give careful consideration to special conditions suggested by buyers before agreeing to their inclusion into property contracts.

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