Sunset Clauses Under Scrutiny as Class Action Costs Developer Millions

Buyers who signed up for $465,000 off-the-plan apartments have won a multi-million-dollar class action settlement after contracts were terminated when the project’s builder collapsed. The Brisbane Supreme Court this month approved the settlement against Dennis Corporation, developers of the $100-million Summerlin Estate at Banyo in Brisbane’s north. The contracts of more than two dozen buyers were terminated, leading to a class action being launched that alleged some of the off-the-plan contracts had been wrongfully terminated. The case has heightened scrutiny of sunset clauses, which allow the termination of contracts if they are not settled within 18 months, as the Queensland Government progresses a review of the regulations around such clauses. Project stalls when builder liquidated Dennis Corporation’s Summerlin Estate plans had been in the works for more than a decade, with plans initially filed with the Brisbane City Council in 2015 for a 3.16ha site off Ivedon Street. Construction was to commence in 2022 with a projected settlement date of April 2024. Some of the estate had already been completed, but the developer told buyers in February 2025 that contracts would be terminated after the development stalled following the liquidation of the builder of the estate, PPS Commercial, in mid-2024. ▲ Some stages of the Summerlin Estate by Dennis Corporation had been built when the contracts were terminated. After the collapse of PPS Commercial, the buyers were reportedly told that the project was no longer financially viable. It was alleged that the contracts were terminated after property values rose by 40 per cent in the intervening years. Apartments originally priced at $465,000 were potentially worth closer to $800,000, based on the sales prices of similar homes in the area. The buyers argued that this amounted to a wrongful termination of their off-the-plan contracts, which they had signed in 2021. Bringing on Carter Capner Law, they launched a class action against Ivedon Street Pty Ltd, a Victorian company within the Dennis Corporation group. Dennis Corporation settlement Brisbane Supreme Court approved a settlement of the class action this month, and Carter Capner Law has now revealed the details of that settlement. The developer must pay $3.755 million to the buyers, according to the deal. Three of the buyers of units in the Summerlin Parklands Estate will receive about $475,000 each, which accounts for 100 per cent of the price differential of the apartments. Ten others who accepted the return of their deposits from the developer after the purported termination will receive about $230,000 each. ▲ The Summerlin Estate Stage 3 comprises a five-storey apartment block. The developer must also pay legal costs for the class action, which was approved for the sum of $700,000. In a statement to The Urban Developer, Dennis Corporation said that it was an “unfortunate set of circumstances for all involved” when PPS went into administration. “We hope this settlement can alleviate some of that for customers and we are looking forward to the project being completed,” it said. Carter Capner Law director Peter Carter said the outcome was a “fair and reasonable settlement” that took into account the risks each of the buyers took to pursue their claims. He said the decision sent a warning to developers who invoked sunset and economic viability clauses to terminate contracts. ▲ Stage 5 of the project is made up of 21 townhouses. “Arguably they’re an unfair contract term and contravene Australian consumer law,” Carter says. “The original use of sunset clauses was allowed for the buyer to be able to terminate if the development didn’t proceed within a reasonable time it wasn’t completed. “This use of sunset clauses by the developer is a relatively recent phenomenon, only arising because of the economic circumstances and rapid escalation of real estate prices.” Consecutive global crises which have prompted a rise in construction costs and extended planning and completion have compounded the issue. Sunset clause reform The use of sunset and economic viability clauses has been under the microscope of late. Laws enacted in 2023 by the Queensland Government are aimed at protecting buyers of land and house/land packages from sunset clauses, but exclude apartments, condominiums and other community title schemes. A public consultation regarding the effectiveness of the 2023 reforms concluded in October 2025 and the state is now reviewing responses. The review was triggered by reports of buyers being left in limbo, or high-profile contract termination cases such as the Queen’s Wharf Residences . Co-owners Far East Consortium and Hong Kong-based diamond dealer Chow Tai Fook announced last year that contracts would be terminated after experiencing “unheralded cost increases and [issues with] supply chains”. ▲ The Queen’s Wharf residential and casino precinct includes the 72-storey Queen’s Wharf Tower. A Queen’s Wharf Residences spokesperson at the time said that the conglomerate was seeking a 12.5 per cent price increase on the apartments, which according to Queen’s Wharf Tower website, ranged from $585,000 to $6.7 million. These instances raised questions about the use of sunset and other similar clauses, Carter said. “While there is already a legal remedy there and class action can be a good vehicle for appropriate cases, the question is, what’s best for consumers?” Carter said. “The situation in New South Wales is good in that the developer has to apply to the court for an order to be able to exercise a sunset clause. “That’s assuming the buyers are well represented, otherwise it might just turn into a rubber stamp.” The 2023 reforms brought in similar measures and there is a chance Queensland could go the same way with the current review. “They will certainly be looking at what happens in other states, and there’s a good chance the New South Wales model might be followed,” Carter said.

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Clare Burnett
Tue 28 Apr 26

Sunset Clauses Under Scrutiny as Class Action Costs Developer Millions

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