Australia Back to Real Estate News Homepage to RSS for this country

AU Property News

AU Melbourne tower site tussle over claim cheque bounced

Property Here - Friday, June 21, 2013

Share to:

CLAIMS that the sale of a landmark CBD site for a controversial $100 million skyscraper failed when a $1 million cheque bounced has sparked a legal showdown.

Melbourne lawyer and migration agent Konfir Kabo launched a multi-million lawsuit against two Chinese investors in the County Court last week.

The site at the centre of the stoush, 36-40 La Trobe St, has planning approval for one of the city's skinniest residential towers: a 35-storey "needle'' featuring 243 apartments, 42 car spaces and a restaurant, all with an estimated end value of $100 million.

Mr Kabo alleges Zhiyu Wei and Sam J Xia breached the contract of sale they entered with his company, Argo Pty Ltd, in March.

The Indonesian-born lawyer claims the pair agreed to purchase the property for $9.6 million on March 28, but that a 10 per cent deposit cheque bounced when presented to the banks.

Argo's statement of claim, lodged with the County Court last week, says the defendants failed to act on a default notice and the contract was terminated on April 11.

The following month the site was sold for $8.5 million to an undisclosed local buyer.

Mr Kabo had purchased the property for $5.33 million less than three years earlier.

He is now seeking to recover the unpaid $960,000 deposit, the $1.1 million reduction in the eventual sale price, plus damages, interest and costs.

The value of the site increased significantly last year when Melbourne City Council controversially granted a permit for the 118-metre tower.

The development, which must begin within two years, will see the historic, 1876 GMK House demolished and replaced with one of Melbourne's thinnest residential towers.

City planning officers opposed the complex, designed by Ellenberg Fraser, as an "overdevelopment'' owing to its height and lack of setback. But the council voted 6-3 in favour of the plan in February last year.

Mr Kabo was one of several developers who had made donations to former Deputy Mayor Gary Singer's failed bid last October to become Melbourne's Lord Mayor.

It is understood the two would-be buyers were unable to proceed with the purchase when their offshore finance fell through.

Read more: