Sunshine Coast real estate agent Kelly Rowling sues former business partners after Palmwoods unit development fails

A Coast real estate agent claims she went above and beyond to cover the costs of a failed unit development. Now she is suing her former business partners.

Sunshine Coast real estate agent Kelly Rowling (pictured with husband Dan Rowling) is suing her former business partners after a proposed unit development at Palmwoods failed.

A Coast real estate agent is suing her former business partners for more than $440,000, claiming their venture struggled to pay back a loan for a failed unit development.

Rowling and Co principal Kelly Rowling has lodged a civil claim against builder Peter Hamilton, 58, Marie Therese Poole, 52 and Michelle Lee-Anne Coleman, 48, claiming that they failed to act in good faith and failed to mitigate against a loss incurred by their venture, PKM Palmwoods.

Mr Hamilton, Ms Poole and Ms Coleman are former directors of the company.

Ms Rowling and her husband Dan were last year voted by Daily readers to be the third most popular real estate agents on the Sunshine Coast.

Her claim, which is before Maroochydore District Court, says PKM Palmwoods was set up in September 2017 as a partnership to develop units on a Churchill Street property in Palmwoods.

Their company was “founded on mutual trust, confidence, assistance and commercial interest in obtaining a mutual profit”.

Ms Rowling claims in court documents the venture had borrowed $411,030 from Ms Rowling’s parents Christopher and Janelle Worrall and used that money to buy the property a month later.

A design drawing submitted to Sunshine Coast Council in February 2018 shows what the development was intended to look like. The application was ultimately refused.

Property records show the company paid $395,000 for the site.

Ms Rowling’s claim says a further $200,000 was borrowed from Brisbane couple Alan and Christine Marnie, who have been long time friends of the Worralls, in November 2017 to also fund the development.

But according to claims made by Ms Rowling in the documents, their venture was rendered “commercially unviable” when Sunshine Coast Council refused their development application.

Sunshine Coast Council’s online planning records show PKM Palmwoods lodged an application on February 15, 2018, to build 12 units on the 1636sq m block.

They show the application was refused on August 8, 2018, for reasons including clashes with eight separate sections of the Coast’s planning scheme.

A design drawing submitted to Sunshine Coast Council in February 2018 shows what the development was intended to look like. The application was ultimately refused.

According to the claim, Ms Rowling and her business partners defaulted on loan repayments to her parents in March 2019, bumping the interest rate up from 15 per cent to 17 per cent.

The same happened when they defaulted on the Marnie loan two months later.

Property records show the Churchill Street block was advertised for sale in March 2020, initially seeking offers above $650,000 with Ms Rowling’s husband Dan Rowling listed as the agent.

Ms Rowling’s claim says demands for payment for both loans came on August 6, 2020, by which time the Worralls were asking for $590,855.63 and the Marnies were asking for $287,000.

It represented a rise of 266,825.63 on the original loan and payment was demanded within a fortnight.

Ms Rowling says in her claim she reached out to her business partners to discuss how to best mitigate the loss but they did not respond within her three-day deadline.

Ms Rowling says she locked in a buyer for the property for $390,000 in late August 2020 but she needed authority from her business partners to complete the contract.

She says she was unable to get that authority from Ms Poole or Ms Coleman, claiming they “wilfully refused or neglected to engage” with her.

The claim says the sale fell over in October after the buyer pulled out because Ms Poole and Ms Coleman failed to authorise it.

Australian Securities and Investments Commission documents show Ms Poole and Ms Coleman ceased being directors of PKM Palmwoods about a week before the contract was terminated.

Property records show the block was being advertised in late October seeking offers above $350,000, a reduction of $300,000 from what had initially been sought.

Ms Rowling’s claim says a new buyer was found in November and a sale for the Churchill Street block was finalised a month later for $373,000.

A Churchill Street block in Palmwoods remains vacant after a bid to build units on it was knocked back by Sunshine Coast Council.

She says she made payments using the sale proceeds on separate dates between December 2020 and January 2021 totalling $168,978.37 for the Worralls and $200,000 for the Marnies.

The claim says Ms Rowling then emailed Mr Hamilton’s lawyers to say he owed $191,335.58, Ms Poole’s lawyers to say she owed $95,667.79 and wrote a letter to Ms Coleman to say she owed $95,667.79.

Ms Rowling says she then in April used $637,724.18 of her own money to clear the debts to her parents and Marnies.

After taking into account her obligations to the debt, her claim said that represented an overpayment of $425,149.25.

Her claim says the actions of her business partners, or lack thereof, were “reprehensible, clearly demonstrate a breach of mutual trust between the parties and evidence a failure to subordinate their own interests to satisfy the objectives of the joint venture by failing to mitigate the loss accumulated by the loan agreements”.

It says Ms Rowling’s actions of good faith, particularly in bearing the sole burden of mitigating the loss sustained to the venture, extended beyond what could be reasonably expected of her.

It asked the court to order her former business partners to pay a total of $444,787.45 as equitable compensation or as damages for unconscionable conduct.

Mr Marnie said it was disappointing the venture had not worked and he had been trying to help Ms Rowling out when he agreed to back the proposal.

Ms Rowling declined to comment and Mr Worrall said he didn’t have much to add.

Efforts to contact Mr Hamilton, Ms Coleman and Ms Poole were unsuccessful.

No defence has been lodged to Ms Rowling’s claim.