Menniti v Chan

Menniti was the purchaser of a lot in a community titles scheme in Queensland. Chan was the seller. Menniti sought to terminate the contract for the sale of the lot, claiming that Chan had breached section 206 of the Body Corporate and Community Management Act 1997 by failing to disclose certain matters. Chan counterclaimed for damages for breach of contract. The primary judge found that Chan had breached section 206, that Menniti was entitled to terminate the contract, and that Chan was entitled to damages for breach of contract. The primary judge held that damages were available under section 206, in addition to the right to terminate the contract, and that Chan was entitled to the full amount of the liquidated damages under the contract. Menniti appealed to the Queensland Court of Appeal.
The appeal turned on the interpretation of section 206 of the Act and whether damages were available in addition to the right to terminate the contract. The Court of Appeal held that the right to terminate the contract was the exclusive remedy for breach of section 206 and that damages were not available. The Court of Appeal also held that Chan was entitled to the full amount of the liquidated damages under the contract. The Court of Appeal dismissed Menniti’s appeal and allowed Chan’s cross-appeal.
The Court of Appeal held that the language of section 206 made it clear that the right to terminate the contract was the exclusive remedy for breach of section 206. The Court of Appeal held that the right to terminate the contract was a statutory penalty and that damages were not available in addition to the right to terminate the contract. The Court of Appeal held that the contract provided for the liquidated damages recoverable by the seller and that Chan was entitled to the full amount of the liquidated damages under the contract. The Court of Appeal ordered that the plaintiffs’ claims be dismissed and that there be judgment for the defendants on their counterclaim in the sum of $663,311.23, plus interest and costs. The Court of Appeal also ordered that there be a payment out of court to the defendants of the sum of $271,500 plus all accretions thereon.