Most Read Contributor in Australia, September 2016
On 22 March 2012, the Planning and Environment Court of
Queensland (Court) granted the Gold Coast City
Council (the Council) an injunction restraining
the mortgagee in possession from exercising its power of sale over
Lot 15 Caballo Road, Guanaba (Guanaba property)
until further notice.
An auction for the sale of the Guanaba property was scheduled
for 31 March 2012. The Information Memorandum stated:
The subject property is 65.11 Hectares in size (160 acres
approx) with a Rural Zoning and located on Caballo Road at Guanaba.
The property is fairly heavily timbered and quite steep in parts,
however there are a couple of areas where a home could be built
with quite fantastic views, particularly from the peaks on the
ridge which overlooks the coast.
To complicate matters, the Guanaba property was subject to a
development approval, which showed Lot 15 as park on relevant
plans. Condition 22 of the approval stated:
The land shown as park on the plan of subdivision shall be
dedicated to the Crown at the applicant's expense.
The Council did not make any attempts to enforce the development
condition until it became aware that the Guanaba property was
advertised for sale (4 years later).
The Court acknowledged the difficult position of the mortgagee
in possession, but preferred that the fate of the Guanaba property
be decided before a sale to a third party. It warned that if future
purchasers did not proceed with the development after Guanaba
property was sold for a nominal amount, the mortgagee in possession
would risk not discharging its obligation to take reasonable care
to ensure that the property is sold at the market value.
The decision of the Court in this case of Gold Coast City
Council v Crest Hill Pastoral Company Pty Ltd & Ors 
QPEC 025 is a timely reminder for mortgagees and receivers
exercising a power of sale. It is important that development
approvals are reviewed, to ensure that the necessary development
conditions have been complied with and that appropriate disclosure
is made to potential buyers.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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