Win over developer in flood dispute

THE buyer of a luxury riverfront unit made uninhabitable by Brisbane's January floods has won a long and expensive legal battle.

THE off-the-plan buyer of a luxury riverfront unit made uninhabitable by Brisbane's devastating January floods has won a long, expensive legal battle to bail out of the deal, setting a potentially important precedent.

The decision by the Queensland Court of Appeal yesterday adds to the woes of developer Mirvac with its prestige Tennyson Reach apartments, after the company was forced to write its carrying value in the project down to virtually zero as a result of flood damage.

In what was seen as a test of whether a buyer could void a contract following the floods -- which inundated 14,700 homes in Brisbane on January 13-14 -- Mirvac had sought to hold Maris Anne Dunworth to a 2007 agreement to pay $2.155 million for a ground-floor apartment in the riverside block.

This was despite the unit being so badly damaged by floodwater that it was agreed it was uninhabitable at the time the off-the-plan contract was due to settle.

Eight other ground-floor apartments were flooded as well, along with basement levels.

The win for Ms Dunworth came yesterday as the commission of inquiry into the summer floods in Queensland offered confidentiality to people who want to detail a bad experience with their insurer.

Ms Dunworth, the wife of former Australian representative rugby union player David Dunworth, had launched legal proceedings against Mirvac Queensland to void the contract on the Tennyson Reach unit before the floods, alleging she had been induced to buy by false, misleading and deceptive representations.

She lost the opening round of the court battle last December, when a judge ordered that the sale go through.

She went back to court after the floods, reapplying to have the contract rescinded because of the damage done to the unit. Mirvac had said the repair job would take four months.

After Ms Dunworth rejected the company's offer to pay for the work, a Supreme Court judge again ruled against her in February and gave Mirvac until June to complete the work and the contract.

However, the Court of Appeal yesterday upheld her right to terminate the contract.

"It follows that because, as conceded, the unit was rendered uninhabitable by the date of the purported rescission, the appellant gained a right to rescind at any time up to the date of actual completion or possession," Chief Justice Paul de Jersey said in his written reasons.

Mirvac said last night it was disappointed at the decision and was "considering" the court's judgment.

Real Estate Institute of Queensland managing director Dan Molloy said the implications of the decision were limited because neither party had disputed the key point that the apartment was uninhabitable after the flood. "I don't see it as a precedent-setting issue for the general transaction of real estate sales," he said. "It is more the particular circumstances of this case."

ADDITIONAL REPORTING: AAP