The Queensland Court of Appeal has delivered its much
anticipated judgement in the case of Bossichix Pty Ltd v
Martinek Holdings Pty Ltd  QCA 154; a case that is of
importance for all off the plan sales of lots in community titles
schemes in Queensland.
The Court of Appeal has held that s 212 Body Corporate and
Community Management Act 1997 (BCCMA) requires
contracts to provide for the settlement to be a minimum period of
14 days after notice to the buyer that the community titles scheme
for the lot sold has been established and that a reference to plan
registration alone will not be sufficient to satisfy the BCCMA
Commonly, off the plan contracts provide for settlement to occur
a specified period after completion of construction and title to
the lot sold. In Queensland, the BCCMA requires that the contract
states that settlement must not take place earlier than 14 days
after the scheme has been established. Establishment of a community
titles scheme occurs only when both the plan of subdivision is
registered and the community management statement for the scheme is
The underlying purpose of the section, the Court held, is to
inform the buyer that the scheme has been established and to allow
a sufficient time prior to settlement for the buyer to make any
necessary searches and enquiries.
It followed in the Court's view that the contract must refer
to scheme establishment and not just plan registration in the
context of fixing the settlement date. The Court held that a
contract providing for settlement to occur 14 days after notice to
the buyer that the relevant plan of subdivision was registered did
not go far enough because it did not refer to scheme establishment
or the recording of the community management statement with the
plan of subdivision. Consequently the buyer's termination of
the contract was upheld.
Queensland has highly technical consumer protection legislation
in relation to sales of lots in community titles schemes and
residential property. In Bossichix, the Court did say that there is
no requirement to use the exact language of the section as long as
the effect of the contract is that the buyer is informed that
settlement will not take place earlier than 14 days after the
scheme is established, which could be achieved by referring to all
of the steps required for that to occur - plan registration and
recording of the community management statement for the scheme.
There was implicit criticism of the harshness of the section in
the leading judgment, where her Honour McMurdo J noted that the
purpose of the section could have just as easily been satisfied by
deeming all contracts to include the requirement especially given
that "there would seem to be no prospect that the buyer could
have been prejudiced by the non-compliance with the statute such
that it should be necessary to make the contract voidable by one
Section 212 also on its face requires that the contract actually
contain a restriction on settlement taking place earlier than 14
days after scheme establishment. This point did not fall to be
considered at first instance but McMurdo J indicates that it is not
necessary for the contract to actually contain such a prohibition
as long as the legal effect of the clause is to fix the settlement
date at a time no earlier than 14 days after scheme establishment.
This conclusion was not however universally endorsed by all of the
The key points to come from the Bossichix decision are that:
Off the plan contracts must reference scheme establishment and
not just plan registration in fixing the settlement date. If this
does not happen a cancellation right will exist irrespective of
there being no real prejudice to the buyer. It will probably be
enough that the contract refers to both the act of registering the
plan and recording the community management statement in the
absence of specific reference to "establishment of the
scheme" but it would be safer to use the language of the
Sellers must not agree in the contract or separately to settle
earlier than the 14 day period as a conclusive agreement between
the parties to do so could create a cancellation right where none
would otherwise exist. Even if the contract does refer to scheme
establishment, an agreement to settle within the 14 day period
referred to in section 212 could trigger a breach of the section.
This is important as buyers sometimes ask to settle earlier than
the contract settlement date .
While there may be an argument that contracts need not contain
an express prohibition on settling earlier than 14 days, contracts
should include such a restriction to rule out an argument based on
that interpretation of the section.
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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