Sunset Date for Registration of Plan of Subdivision must be fixed

July 31, 2009

The recent decision of Clifford & Anor v Solid Investments Australia Pty Ltd [2009] VSC 223 (Bongiorno J) suggests that the sunset date for registration of the plan of subdivision must be fixed, and cannot be extended.

In Clifford, the Vendor served notices extending the sunset date for registration of the plan of subdivision on three occasions. Before the last notice was served, the purchasers served a rescission notice and challenged the right of the Vendor to extend the plan registration date beyond the original sunset date.

Borgiorno J held that the contractual provisions allowing an extension of the sunset date contravened section 9AE of the Sale of Land Act 1962 (Vic) and were of no effect. A definite period of time must be fixed so that the purchaser can know the date after which the contract can be rescinded. The project risk lies with the Vendor, and purchasers should not be exposed to the risk of the time for completion of a development being extended indefinitely. In Clifford, the purchasers were entitled to rescind and recover the deposit paid.

This decision has since been appealed, and the Court of Appeal is yet to hand down a decision.

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