ApartmentsTaryn ParisFri 30 Oct 26
Cavcorp Court Win Draws a Line Under Developer Sunset Clause Risk
Cavcorp has won its fight over the sunset clause at Luminare, with the Queensland Court of Appeal ruling 2-1 to overturn a $6.1 million damages order against it.
The decision, handed down on Friday, October 30, sets aside Chief Justice Helen Bowskill’s June 2025 finding that Cavcorp wrongly terminated the off-the-plan contract.
The court dismissed the buyer’s claim in full and ordered her to pay Cavcorp’s legal costs for both the trial and the appeal.
Justice Crow said the seller’s termination was lawful.
Cavcorp director Damien Cavallucci said the outcome provided certainty to the development industry and equal contractual fairness for both buyers and developers.
He said it reflected the need to consider the “full factual and commercial circumstances” of a contract, including the pandemic, labour and trade shortages, supply-chain disruption and the impact of a “one-in-100-year flood event”.
He said it gave buyers, financiers, subcontractors and staff greater certainty that “properly negotiated and executed contracts will be respected”.
“All we sought was a fair outcome, almost nine years after the contract was entered into,” Cavallucci said. “While we welcome the decision, we remain disappointed by the substantial time, cost and effort required to reach this point.”
The dispute centred on two sub-penthouses at Cavcorp’s Luminare tower at 20 Festival Place, Newstead.
The JYP Jiang Family Trust bought them off the plan in 2017 for a combined $4.2 million.
Cavcorp terminated in April, 2023 under a sunset clause that allowed either party to walk away if it “cannot” give notice of issue of title within 5.5 years.
It then resold the apartments for a combined $8.8 million.
The buyer sued, and the Supreme Court found the apartments were worth $10.3 million when settlement should have occurred, awarding $6,097,841.42 to the buyer.
The appeal focused on the meaning of “cannot”.
The buyer argued Cavcorp could have issued the notice because separate titles had been created. The Supreme Court agreed.
But the Court of Appeal did not.
Justice Hindman said the word must be read in a commercial, businesslike way, and imports an actual, practical ability to act, not merely a bare physical possibility.
Issuing the notice would have started a 14-day settlement countdown, forcing Cavcorp to demand full payment for apartments that weren’t finished. The building had not received a certificate of occupancy and wasn’t ready for handover, so doing that would have put it in breach.
“No reasonable businessperson would think that they ‘can’ issue” the notice in those circumstances, Justice Hindman found.
Justice Crow agreed, saying any other reading would force a seller to issue a settlement notice before a lot was complete in all respects.
The Urban Developer in September of last year reported on the Supreme Courty case, which was seen as a signal that developers faced tougher scrutiny.
