The Supreme Court’s declined to hear an appeal by Dean Franklin entity, FCL CL Ltd, of a Court of Appeal decision that upheld two High Court decisions in 2024 ordering the company to honour the contracts.
FCL tried to walk away from sale agreements with two buyers, signed in 2020 and 2021, claiming the Covid-19 pandemic and escalating building costs justified the triggering of a ‘force majeure’ clause to cancel them.
In mid-2023, concerned his financier wouldn’t extend funding to allow FCL to complete the three-block, 28-unit complex in McAdam Dr, Franklin asked one buyer couple for a 37% increase to their purchase price, from $795,000 to $1,094,000, and another buyer for an 18% increase, from $1,301,000 to $1,548,000.
However, they refused the price hikes, and after rejecting FCL’s subsequent threats to cancel their agreements, lodged caveats over the development to protect their interests.
Further legal wrangling led to the High Court, which in two decisions in 2024 found the buyers had legitimate claims to enforce their contracts.
FCL then took the matter to the Court of Appeal, which in its decision last September found a force majeure clause could not be triggered just because a development had become much more expensive.
That court upheld the High Court’s decisions and dismissed the company’s appeals.
In the latest decision, the Supreme Court found the Court of Appeal ‘‘did not misdirect itself’’ in applying legal tests to the case.
The proposed appeal by FCL did not present an issue of ‘‘general or public importance, commercial significance, or the appearance of a substantial miscarriage of justice’’, it said.
