Off-the-plan contracts: Court of Appeal decision highlights risks for Queensland buyers
The Queensland Court of Appeal’s decision in CAV Gasworks Pty Ltd v JYP Jiang Pty Ltd [2026] QCA 221 provides a significant warning for buyers entering into off-the-plan contracts. It demonstrates how the precise wording of a sunset clause can permit a developer to terminate a contract even after titles have been created.
The decision also highlights the need for legislative reform to provide buyers of proposed community title lots with protections comparable to those applying elsewhere in Australia and to other off-the-plan land sales in Queensland.
Below we cover:
- Background
- The original Supreme Court decision
- The appeal
- What this means for off-the-plan buyers
- The case for legislative reform
background
In June 2017, JYP Jiang Pty Ltd agreed to purchase two proposed units in the Luminare development at Newstead for a combined price of $4.2 million. A deposit of $420,000 was paid.
The contract contained a 5.5-year sunset clause. Clause 8.3 allowed either party to terminate if the seller “cannot” give a specified notice within that period, advising the buyer that the survey plan and community management statement had been registered, the community titles scheme had been established and separate titles had been created.
Although separate titles were created before the sunset date, the apartments were not ready for settlement. In particular, the building did not yet have the required certificate of occupancy and the seller was not in a position to perform all its settlement obligations.
In April 2023, the seller, CAV Gasworks Pty Ltd, terminated the contract. It subsequently resold the apartments under separate contracts for a combined price of approximately $8.8 million.
The buyer disputed the validity of the termination and later claimed damages for breach of contract.
The original Supreme Court decision
At first instance, the Supreme Court found in favour of the buyer. The Court interpreted “cannot” as requiring an actual inability or impossibility to give the relevant notice.
Because the separate title requirements had been satisfied before the sunset date, the primary judge concluded that the seller could have given the notice. Its purported termination was therefore invalid.
The buyer was awarded $6,097,841.42, including interest. The damages were principally calculated by reference to the difference between the $4.2 million contract price and the apartments’ assessed market value of $10.3 million.
The appeal
The Court of Appeal overturned that result by a 2–1 majority.
Crow J and Hindman J concluded that the contract had to be interpreted commercially and as a whole. Under the contract terms, giving the notice would have triggered settlement within 14 days. However, the seller was not practically able to complete its obligations within that period.
Hindman J found that “cannot” was not confined to literal or physical impossibility. It included an absence of practical ability. A reasonable businessperson would not understand the contract as requiring the seller to issue a notice that triggered settlement when the seller could not provide a completed apartment and would consequently be placed in breach.
Crow J similarly concluded that the seller was not required to give the notice until it was in a position to satisfy its contractual and legal obligations at settlement.
Bradley JA dissented. His Honour considered that the sunset clause concerned whether the separate title requirements had been met. As those requirements had been satisfied before the sunset date, the seller could not rely on the clause to terminate.
The majority allowed the appeal, dismissed the buyer’s damages claim and ordered the buyer to pay the seller’s costs of both the trial and appeal on the standard basis.
What this means for off-the-plan buyers
This decision illustrates the considerable contractual risk carried by off-the-plan buyers.
Off-the-plan contracts are often signed years before settlement. During that period, property values can change substantially.
If a developer can terminate after the sunset date, the buyer may receive their deposit back but lose:
- the property they expected to acquire;
- the benefit of any capital growth;
- the ability to purchase a comparable property at the original price; and
- costs incurred arranging finance, valuations and the future use of the property.
The return of a deposit does not necessarily place the buyer in the position they would have occupied if the contract had proceeded.
Sunset clauses are not merely administrative deadlines. Depending on their wording, they may confer valuable termination rights on a developer. Buyers should not assume that registration of title, substantial completion of construction or expiry of the nominated period will necessarily preserve their right to settle.
Before signing, an off-the-plan contract should be reviewed carefully, with particular attention to:
- sunset dates and termination rights;
- the events that trigger settlement;
- the developer’s rights to extend time;
- clauses allowing changes to plans, finishes or lot dimensions;
- completion and certificate-of-occupancy requirements; and
- the consequences if construction is delayed or the contract is terminated.
Once a contract has been signed, it may be too late to renegotiate provisions that materially favour the developer.
The case for legislative reform
The decision also exposes a gap in Queensland’s consumer protection framework. The Property Law Act 2023 (Qld) restricts a seller’s ability to terminate certain off-the-plan land sale contracts under sunset provisions without the buyer’s consent or a court order. However, that regime does not provide protection for contracts for proposed lots in community titles schemes.
Buyers of proposed community title lots remain subject to the separate regime under the Body Corporate and Community Management Act 1997 (Qld). This produces a significant difference in protection, even though those buyers face similar risks, including construction delays, increases in property values and termination by developers seeking to rely on sunset clauses
Legislative reform is required to bring Queensland community title sales into line with the protections applying to other off-the-plan land sales and in comparable states.
Until that gap is addressed, careful pre-contract review remains a buyer’s most important protection.
If you have any queries or concerns about your off-the-plan contract, please contact the MAP Lawyers team on 1300 680 584 or contact@maplawyers.com.au.
This article reflects the Court of Appeal’s decision delivered on 30 October 2026. Any application for special leave to appeal to the High Court may affect the position outlined above.
