ACCC slams property developer for misleading golf course claims

The Federal Court has found a property developer made misleading claims about the progress of construction of a golf course that was the centerpiece of a Gold Coast property development.

The Federal Court has found a property developer made misleading claims about the progress of construction of a golf course that was the centerpiece of a Gold Coast property development.

The Australian Competition and Consumer Commission took action against Queensland developer Ingles Group and its managing director, Graeme Ingles, over 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.

But the Federal Court found that by sending the letter to potential buyers, the Ingles Group engaged in misleading and deceptive conduct. The problems with the letter included:

• Ingles said it had approval from the Gold Coast City Council to construct the golf course when in fact the approval granted was only preliminary.
• Ingles said the sole or primary cause of delay in construction was the drought when the primary cause was failure to obtain final council approval.
• Ingles represented by implication that the course’s construction would soon be well underway and would not be subject to any significant delays when in fact there were likely to be further significant delays.

The court granted injunctions, by consent of Ingles Group and Graeme 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.

ACCC chairman Graeme Samuel praised Ingles Group for co-operating with the watchdog to resolve the matter and said the company had agreed to 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.

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.

Samuel says the case emphasises the importance for property developers of ensuring the accuracy of all claims they make about a project.

“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,” he says.

“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.”

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