Media release | Supreme Court clarifies vendors’ obligation to notify of surface level works

On 21 September 2023, the Supreme Court of Victoria confirmed that vendors have an express and ongoing obligation under off-the-plan contracts to notify purchasers of works affecting the natural surface level of the lot.

The judgment, Asia Digital Investments Pty Ltd v Mara Dextra Pty Ltd [2023] VSC 565, concerns the off-the-plan sale of land in Portsea, and specifically considers whether the vendor in this case failed to comply with its disclosure obligations under the Sale of Land Act 1962 (Vic) (the Act).

Gadens acted on behalf of the plaintiff purchaser, Asia Digital Investments Pty Ltd, who claimed that the vendor defendant, Mara Dextra Pty Ltd, failed to appropriately disclose details of works after the day of sale affecting the natural surface of the land.

Associate Justice Ierodiaconou held that the ‘real issue’ in dispute is whether the vendor met its disclosure obligations under the Act, and in particular whether the vendor’s purported disclosure was made:

1. to the purchaser;
2. as soon as practicable; and
3. with the requisite details.

Ierodiaconou AsJ noted this dispute ultimately concerned ‘questions of statutory construction’, finding in favour of the purchaser and holding that the contracts of sale had been validly rescinded under the Act.

Andrew Kennedy, partner, said of the judgment:

“The decision is a reminder to all developers and their legal representation that there is a positive, ongoing obligation of disclosure in relation to changes to surface area pursuant to the Sale of Land Act. Failure to disclose as soon as practicable can create a circumstance where a purchaser may be able to rescind a contract of sale.”