Claims about the development and progress of a Gold Coast golf course by the Ingles Group (Qld) Pty Ltd and its managing director, Mr Graeme Ingles, have been found to be misleading.
The Australian Competition and Consumer Commission has obtained final orders, by consent, in the Federal Court, Brisbane against the Ingles Group and Mr Ingles for misleading prospective buyers about the progress of the construction of the golf course, which was to form part of a Queensland Gold Coast housing estate.
The Ingles Group developed and marketed the Tee Trees Residential Golf Community estate at Arundel. A major selling feature was that it would include a golf course but there were significant delays in construction of the course.
In 2003, the Ingles Group distributed a letter to potential buyers, providing an update on the golf course construction and a purported explanation for the delays.
Justice Spender declared that, by sending the letter to potential buyers, the Ingles Group engaged in misleading and deceptive conduct. It had breached section 52 of the Trade Practices Act 1974 by:
- representing that it had approval from the Gold Coast City Council to construct the golf course when in fact the approval granted was only preliminary and required that various further steps be taken before final approval could be granted
- representing that the sole or primary cause of delay in construction was the drought when the primary cause was failure to obtain final council approval
- representing that it had called for tenders for bulk earthworks for the completion of the course and was awaiting the tender results when it had not yet called for tenders
- representing that bulk earthworks for completion of the golf course would begin once tenders were received, when it did not have reasonable grounds for making such a claim, and
- representing, by implication, that the course's construction would soon be well under way and would not be subject to any significant delays when it did not have reasonable grounds for such a claim, and when there were likely to be further significant delays.
The court also declared that Mr Ingles was knowingly concerned in the contravention of section 52 of the Trade Practices Act by the Ingles Group.
The court granted injunctions, by consent, restraining the Ingles Group and Mr Ingles from making similar misleading representations in relation to any other property developments with which they are involved for five years.
The Ingles Group was also ordered to pay the ACCC's costs.
"The ACCC is pleased that the Ingles Group cooperated to resolve the matter by consent, which has saved resources in reaching a timely and appropriate outcome," ACCC Chairman, Mr Graeme Samuel, said. "The Ingles Group and Mr Ingles have also offered a court-enforceable undertaking to implement a number of corrective steps, including publication of notices in the Gold Coast Bulletin, periodic notices on the Ingles Group's website and mailouts to residents advising of the ongoing progress of the construction of the golf course.
"The Ingles Group has also undertaken to implement a trade practices law compliance program."
Since the ACCC investigation began, the Ingles Group has obtained final council approval to construct the golf course on the estate, and work is now under way.
"This judgment emphasises the importance for property developers of ensuring the accuracy of all claims made," Mr Samuel said today. "The buying of land is a very significant purchase for most Australians, and therefore developers should take very seriously their obligation to make certain that all representations can be substantiated.
"Also, potential buyers need to be careful when making a large purchase, such as land in property developments. It is imperative that they are diligent and make thorough inquiries themselves before making big decisions."