Chinese investor Long Capital Holdings forfeited deposits totalling $2.61 million after pulling the plug on plans to build part of Queenstown’s Jacks Point subdivision. Compliance with Jacks Point’s detailed scheme plan made the project uneconomic.
In June 2017, Long Capital paid deposits totalling $2.61 million after signing a $26.1 million deal to develop five hectares at the upmarket Jacks Point subdivision. The contract was conditional on Long Capital submitting a development plan satisfactory to Jacks Point’s owners. It never did submit a plan, demanding return of its deposit.
Associate judge Johnston ruled Jacks Point could keep the deposit. The High Court was told Long Capital carried out extensive feasibility studies, to the extent a development plan was prepared. But no plan was ever submitted. Potential planning delays and rising construction costs caused Long Capital to back off. It feared the project would be uneconomic. Long Capital could not rely on its own failure to submit plans as proof that the contract was at an end, Judge Johnston ruled.
Jacks Point Village Holdings No.2 Ltd v. Long Capital Holdings NZ Ltd – High Court (19.06.19)
19.116