A Queensland Supreme Court decision handed down in August 2026 has made one thing clear. Our commercial litigation lawyers advise Queensland buyers and developers on their rights under off-the-plan contracts: a developer cannot use a sunset clause to walk away from an off-the-plan contract it no longer wants, particularly when the delay is its own doing. If you bought an apartment off the plan in Queensland, this decision directly affects your rights.
- In Malligan v Chevron Apartments Pty Ltd; Cantavenera v Chevron Apartments Pty Ltd [2026] QSC 195, Justice Freeburn held that a developer cannot use its own failure to complete a project as the trigger for terminating off-the-plan contracts under a sunset clause.
- Where a sunset clause uses the word “must” (imposing an obligation on the developer to achieve registration and settlement), the developer cannot walk away if it failed to meet that obligation.
- The principle: a party cannot rely on its own breach of a contractual obligation to trigger a right to terminate.
- Queensland buyers have protection under the Property Occupations Act 2014 (Qld) which requires vendors to notify buyers before using a sunset clause to terminate, giving buyers 28 days to commence proceedings.
- Both buyers and developers should review the exact language of their sunset clause. Developers and builders should also speak to our building and construction lawyers Brisbane about contract structuring before assuming any termination right exists.
What Is a Sunset Clause in an Off-the-Plan Contract?
An off-the-plan contract is a contract to purchase property, typically an apartment, that has not yet been built. The buyer contracts years before settlement, often before construction has started.
A sunset clause sets a date by which the development must be completed and settlement must occur. If the development is not completed by that date, one or both parties may have the right to terminate the contract.
The original purpose of sunset clauses was protective. They give buyers a way out if a developer cannot deliver the property within a reasonable time. They also give developers some protection if construction is genuinely delayed by events outside their control.
The problem is that sunset clauses have, in some markets, been abused by developers. When property prices rise significantly between the date of contract and the date of completion, some developers have been known to deliberately delay their projects, allow the sunset date to pass, terminate the contracts, and then resell the apartments at the current (higher) market price. The original buyers lose their years of waiting and face repurchasing at inflated prices.
Courts across Australia have increasingly scrutinised these terminations. The 2026 Queensland Supreme Court decision in the Chevron One case is the latest and sharpest statement of the legal position in Queensland.
What Happened in the Chevron One Case?
Chevron Apartments Pty Ltd owned land on Chevron Island on the Gold Coast and proposed a 40-storey residential tower called Chevron One, comprising more than 230 apartment lots.
Two off-the-plan contracts were entered into in 2021:
- Claudio Cantavenera and Maria Salonia contracted to purchase Unit 1305 for $840,000.
- Linda Malligan contracted to purchase Unit 703 for $760,000.
By April and May 2026, the project had not reached settlement. Chevron purported to terminate both contracts, relying on clause 10.2 of the contracts, which it characterised as a sunset clause entitling termination if the project was not completed by a specified date.
The buyers disputed that Chevron had any right to terminate. The matter proceeded to the Supreme Court of Queensland before Justice Freeburn.
What Did the Court Decide?
Justice Freeburn found in favour of the buyers on every point and declared both contracts valid and binding.
The central issue was how clause 10.2 should be read. The clause provided that Chevron “must establish the Scheme, register the Plan and effect Settlement… by the Sunset Date.”
Chevron argued the clause simply set a deadline that, if missed for any reason, entitled it to terminate. The buyers argued the word “must” imposed a binding obligation on Chevron to get the development to that point. On that construction, Chevron could not rely on its own failure to complete as the trigger for termination.
The Court preferred the buyers’ construction. His Honour found that the word “must” conveyed an unambiguous, mandatory obligation, read as a reasonable businessperson would read it. Chevron’s more elaborate argument, attempting to reconcile clause 10.2 with other contract provisions, was rejected in favour of the plain, ordinary meaning of the words actually used.
The Court also rejected Chevron’s alternative termination arguments based on other clauses in the contract and under section 214 of the Body Corporate and Community Management Act 1997 (Qld).
The Legal Principle: You Cannot Rely on Your Own Breach
Underlying the Chevron One decision is a foundational principle of contract law: a party cannot rely on its own breach of a contractual obligation to trigger a right to terminate the contract.
Justice Freeburn applied the Queensland Court of Appeal’s earlier decision in Hope Island Resort Holdings Pty Ltd v Jefferson Properties (Qld) Pty Ltd [2005] QCA 315, which had established the same principle in the context of off-the-plan developments in Queensland.
The principle is straightforward in its application. If a contract places an obligation on Party A to do something by a certain date, and Party A fails to do it, Party A cannot then use that failure as the foundation for a right to exit the contract. That would allow a party to profit from its own default.
In the Chevron One case, Chevron had an obligation to complete the development by the sunset date. It did not. It then sought to use that failure as the mechanism for terminating the contracts with buyers who had been waiting five years and had presumably seen property prices move significantly in the interim.
The Court refused to allow that outcome.
Queensland’s Statutory Protection for Off-the-Plan Buyers
Beyond the common law position confirmed in Chevron One, Queensland buyers have specific statutory protection when developers attempt to use sunset clauses.
Under the Property Occupations Act 2014 (Qld), before a vendor can exercise a sunset clause to terminate an off-the-plan contract, the vendor must:
- Give the buyer written notice of the proposed termination;
- Explain the reason for the termination; and
- Provide the buyer with at least 28 days to decide whether to consent to the termination or commence legal proceedings to restrain it.
This notification requirement gives buyers a critical window to seek legal advice and, if appropriate, apply for an injunction to prevent the termination taking effect. A buyer who receives a sunset clause termination notice and does nothing within those 28 days may lose their ability to challenge it.
If you receive a sunset clause termination notice from a developer in Queensland, the 28-day clock starts immediately. Act immediately.
What Does This Mean for Queensland Buyers?
The Chevron One decision is good news for buyers in off-the-plan developments where a developer has delayed the project and is now seeking to exit.
However, the decision does not mean that all sunset clause terminations are invalid. Several factors determine whether a developer’s sunset clause termination will hold up:
1. The precise language of the clause matters enormously. The Chevron One case turned on the word “must.” If a sunset clause uses permissive language, such as “may terminate” or “either party may terminate,” the analysis is different. Developers whose contracts give both parties a right to terminate if the sunset date is missed may be on stronger ground, regardless of who caused the delay.
2. The cause of the delay matters. Where delay is attributable to the developer’s own conduct or failure, courts are far less willing to allow the developer to use the sunset clause. Where delay is caused by external factors genuinely outside the developer’s control (government approval delays, force majeure events, materials shortages), the analysis may differ.
3. The developer’s good faith is relevant. Courts have been alert to situations where developers have manufactured or allowed a delay to take advantage of rising property prices. Evidence of deliberate manipulation of the sunset date will further undermine any attempt to rely on the clause.
4. The doctrine of equitable estoppel may arise. If a developer has given a buyer assurances that the development will be completed, and the buyer has relied on those assurances to their detriment (for example, by declining to purchase other property), the developer may be estopped from denying the buyer’s right to enforce the contract.
What Does This Mean for Queensland Developers?
The Chevron One decision is a significant warning for developers with off-the-plan contract portfolios, particularly those whose projects have experienced delays.
As Mullins Lawyers observed in their commentary on the case, a single word in a sunset clause can change the commercial outcome of an entire project. Developers who assumed their sunset clause gave them a unilateral exit if the project ran late need to re-examine that assumption carefully.
The key review questions for developers are:
- Does your sunset clause impose an obligation on you (using “must” or “shall”) or grant a right to both parties (using “may”)?
- If the clause is read as imposing an obligation on you, can you demonstrate you met that obligation, or that any failure was caused by factors outside your control?
- Do any other clauses in the contract provide alternative termination rights, and are those rights available on the current facts?
- Have you complied with the Property Occupations Act notification requirements before purporting to terminate?
- What is your exposure if buyers successfully challenge the termination? (Return of deposits plus damages, and potentially an order for specific performance.)
Common Errors That Lead to Litigation
In commercial property litigation involving off-the-plan disputes, the same errors appear repeatedly:
Failing to seek legal advice before purporting to terminate. A developer who terminates without first obtaining advice on the legal construction of their sunset clause is taking an enormous risk. If the termination is held to be wrongful, the developer faces a damages claim from the buyer on top of the cost of the litigation.
Relying on the sunset clause without reviewing related provisions. Sunset clauses rarely operate in isolation. They interact with registration obligations, settlement mechanics, and force majeure clauses. A clause-by-clause review of the entire contract is required before any termination action is taken.
Ignoring the notification requirement. A developer who purports to terminate without giving the required 28-day notice under the Property Occupations Act may be holding an invalid termination from the outset.
Buyers failing to respond to termination notices. Buyers who receive a sunset clause termination notice and assume it is enforceable may inadvertently allow a wrongful termination to proceed. Every termination notice should be reviewed by a solicitor before the 28-day window closes.
How Boss Lawyers Can Help
Boss Lawyers acts for buyers and developers in commercial property disputes, including off-the-plan contract disputes. Whether you have received a sunset clause termination notice and need to assess your options, or you are a developer seeking advice on the enforceability of a termination, we can provide a clear assessment of your position.
Mark Harley has extensive experience in commercial contract disputes in Queensland, including matters before the Supreme Court. Contact Boss Lawyers at 1300 267 711 or via bosslawyers.com.au/contact/ to discuss your matter.
Frequently Asked Questions About Sunset Clauses in Queensland
Can a developer use a sunset clause to terminate my off-the-plan contract in Queensland?
It depends on how the sunset clause is drafted. If the clause imposes an obligation on the developer to complete the development by a specified date (using language such as “must”), the developer cannot rely on its own failure to complete as a trigger for termination. The Queensland Supreme Court confirmed this in Malligan v Chevron Apartments Pty Ltd; Cantavenera v Chevron Apartments Pty Ltd [2026] QSC 195.
What happens if I receive a sunset clause termination notice from a developer?
You have 28 days under the Property Occupations Act 2014 (Qld) to decide whether to consent to the termination or take legal action. You should seek legal advice immediately. A solicitor can assess whether the developer had a legal right to terminate and, if not, seek an injunction or damages on your behalf.
What is the rule that a party cannot rely on its own breach?
This is a fundamental principle of contract law. If you have an obligation to do something under a contract and you fail to do it, you cannot use your own failure as a basis for terminating the contract. In the off-the-plan context, if a developer has an obligation to complete the project by the sunset date but fails to do so, the developer cannot use that failure to trigger a termination right.
Are all sunset clause terminations in Queensland invalid?
No. If a sunset clause gives both parties an equal right to terminate if the sunset date passes, and the language does not impose a mandatory obligation on the developer, the termination may be valid. The analysis depends entirely on the specific language of the clause and the circumstances of the delay. Every contract must be assessed individually.
What can a buyer do if a developer wrongfully terminates an off-the-plan contract?
A buyer whose contract is wrongfully terminated can apply to the court for a declaration that the contract remains valid, an injunction to prevent resale of the property, or damages representing the difference between the contract price and the current market value of the property. In appropriate cases, an order for specific performance (requiring the developer to complete the contract) may be available.
This is general information only and is not legal advice. You should obtain professional advice specific to your circumstances.
