A Supreme Court decision handed down on 21 August 2026 has delivered a clear reminder to Queensland developers: a sunset clause is not a free option to cancel a contract just because settlement has taken longer than expected. In Malligan v Chevron Apartments Pty Ltd; Cantavenera v Chevron Apartments Pty Ltd [2026] QSC 195, Justice Freeburn ruled against the developer of a Gold Coast tower that tried to terminate two off-the-plan apartment contracts on Chevron Island, finding the developer could not rely on its own delay to walk away from the deal.

For anyone who has bought, or is thinking of buying, an apartment off the plan, the decision is a timely illustration of how far a sunset clause can (and can’t) be pushed.

What Happened

Chevron Apartments Pty Ltd owns land on Chevron Island and is developing Chevron One, a 40-storey tower comprising more than 230 apartments. Back in 2021, the developer entered into off-the-plan contracts with two sets of buyers:

• Ms Malligan agreed to buy unit 703 for $760,000, with a contract date of 19 May 2021.
• Mr Cantavenera and Ms Salonia agreed to buy unit 1305 for $840,000, with a contract date of 7 April 2021.

Each contract fixed a “Sunset Date” five years after the contract date, being 19 May 2026 and 7 April 2026 respectively. When those dates passed without settlement occurring, the developer purported to terminate both contracts shortly afterwards (on 22 May 2026 and 21 April 2026 respectively), relying on the sunset clause.

Both sets of buyers challenged the termination. They wanted their contracts to stand, at their original 2021 prices, rather than be forced back into the market at current Gold Coast apartment values.

The developer’s problem: its own contract worked against it

The contracts contained a clause requiring the developer to establish the community titles scheme, register the plan and settle “by the Sunset Date”. On its face, that put a positive obligation on the developer to get the deal done in time, subject to the buyer paying the purchase price and to its own separate and fairly wide termination rights (for example, if finance couldn’t be secured, the project became unviable, or too few lots had sold).

The developer had not invoked any of those rights. Instead, it tried to rely on a different clause that mirrored the buyers’ statutory right to terminate under section 217B of the Body Corporate and Community Management Act 1997 (Qld) (BCCMA), arguing that once the Sunset Date passed the buyers were entitled to terminate under the Act, so the clause gave the developer the same right.

The court wasn’t persuaded. Applying the well-established principle that a party cannot take advantage of its own breach, Justice Freeburn found the developer’s obligation to settle by the Sunset Date was clear and unambiguous, and the developer’s own failure to meet it could not be turned into a right to terminate. The court also rejected the developer’s argument that the clause should be “read down” to avoid a strict result, noting that courts don’t rewrite plainly worded contracts just because the outcome is inconvenient for one side.

The fallback argument: “material prejudice”

The developer also argued that changes to the project (an uncertain timeline for later stages of construction, and increases to expected body corporate levies) would have entitled the buyers to terminate under section 214 of the BCCMA (which allows a buyer who would be materially prejudiced by inaccuracies in the developer’s disclosure to terminate), and that this gave the developer a reciprocal right to terminate.

That argument failed too. The test for “material prejudice” under section 214 is objective, assessed in the particular buyer’s circumstances (Mirvac Queensland Pty Ltd v Wilson [2010] QCA 322), and the court found the levy increases in question (in the order of 40% over five years, from approximately $5,400–$5,547 to $7,494–$7,789) simply weren’t significant enough. There was also no evidence the remaining construction would drag on for any meaningful period; by the time one buyer inspected the site, there was no crane in sight and only landscaping remained. Even a dramatic 437% increase in insurance costs was, in the context of these contracts, a relatively small sum.

The Result

Both contracts were declared valid and binding. The buyers keep their contracts, and will acquire their apartments at their original contract prices. The developer will need to proceed to settlement (subject to any appeal), and the parties are yet to be heard on costs.

What this means if you’re buying or selling off the plan

• A sunset clause isn’t a unilateral escape hatch. If your contract puts a positive obligation on the developer to settle by a certain date, the developer generally can’t rely on missing that date through its own delay to terminate.
• “Reciprocal” termination clauses cut both ways. Developers drafting contracts that mirror a buyer’s statutory rights need to be alive to how that clause will be read if the developer, not the buyer, is the one in default.
• “Material prejudice” has a real threshold. Buyers relying on section 214 of the BCCMA to challenge (or resist) a termination need more than modest cost increases: the prejudice has to be assessed objectively and the buyer must be disadvantaged substantially or to an important extent.
• Timing and evidence matter. The buyers’ evidence about the state of the construction site, and comparable levies on a nearby property, played a real role in the outcome.

If you’re a developer facing delays on a project, or a buyer who has received a termination notice relying on a sunset clause, the specific wording of your contract will determine where you stand. Rose Litigation Lawyers regularly advises both developers and off-the-plan buyers on sunset clause disputes, contract interpretation and termination rights across Queensland. If you’re dealing with a dispute like this one, get in touch for a consultation. This article is general information only and is not legal advice; you should obtain advice specific to your contract and your circumstances.

The content of this publication is intended to provide a summary and commentary only. It is not intended to be comprehensive nor does it constitute legal advice, and has been prepared based on applicable legislation and case authority at the date of publication. You should seek legal advice on specific circumstances before taking any action.