A court has granted an application to seek remedy for Australian and international buyers of the $170 million Grand Central Towers building in Woden for an alleged series of false, misleading or deceptive advertising.
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The latest legal result comes after the Fair Trading Commissioner began court action in 2019 against Geocon Bowes Street, Bowes Street Development, Zapari Property and GZ Developments over their 430-unit project.
The allegations include representing it as a fact that Canberra's light rail project would extend to Woden town centre and stop near the towers when stage two had not been approved.
It also alleged other false advertising included the travel time from the towers to Canberra city being 10 minutes and that a unit could achieve a gross rental yield of seven per cent on the private market.
The advertising is alleged to have been published on various media and marketing platforms, including billboards, brochures and emails.
The conduct allegedly constituted numerous breaches of the Australian Consumer Law (ACL).
Unit sales were off the plan and they have been sold to buyers across Australia and overseas, including China and Hong Kong, ACT Supreme Court documents state.
Following its originating statement of claim, the commissioner lodged changes to it with the defendants consenting to some and disputing four, including the commissioner seeking to include remedy for buyers.
In a recent ACT Supreme Court judgment, acting Justice Verity McWilliam allowed the commissioner to seek a redress for buyers.
She said she agreed with the commissioner who, in citing a previous case, argued that sufficient factual foundation of "loss" suffered by consumers was not needed to be shown before the court can allow a party to seek relief.
She said the relevant section of the ACL "expressly includes redress for a class of persons who are likely to suffer loss and permits the court to make such orders as it thinks are appropriate".
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The judge also said that some of the admitted facts, including an advertising campaign to sell the units, by the defendants already support "a reasonably arguable case" for the commissioner to seek such a relief.
"The defendants admit that among the promotional material was a brochure and that among it contained the words, 'one minute to Woden bus terminal and future light rail terminal' and 'stage two of the $900 million light rail network will also link residents directly to Capital Hill, the Canberra CBD and beyond'," acting Justice McWilliam said.
The defendants also admitted that the brochure made no reference to stage two being subject to approval by the ACT and federal governments, as well as the route and location of the stops for stage two being indicative only at the time.
"The basic facts that are admitted include apartments being advertised for sale and statements being made as part of promotional material that are capable of finding the representations alleged," acting Justice McWilliam said.
"Whether the representations are both proven and found to amount to contraventions will involve questions of fact and of law, having regard to the circumstances at particular points in time.
"However, it cannot be said that the contraventions alleged are entirely without foundation."
The commissioner argued it would avoid the need for individual consumers to start their own proceedings, which requires individual proof of loss against large corporate defendants.
The defendants argued that the court should not allow this because there was no explanation for the delay in making this application.
They said the commissioner's argument that some consumers "may have been affected" did not mean "loss".
They also pointed to a lack of evidence of any complaints or grievances by unit buyers or any other evidence showing any appreciable loss.
As part of the latest amendments to the commissioner's claims, acting Justice McWilliam also allowed it to add GRE Sales as a fifth defendant.
She said doing so was "necessary for the court to properly adjudicate on all issues...and that those issues include the question of what entity may be responsible for any penalty imposed".
She also allowed the allegation that the rental yield breached additional sections of the ACL.
The commissioner was ordered to pay the costs of its latest application.
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