Grand Central Towers in Woden. Promotional material went too far in overstating the benefits of light rail. Photo: Thomas Lucraft.
The ACT Supreme Court has handed out more than $6 million in fines for “misleading, deceptive and false” advertising related to the Grand Central Towers residential project in Woden.
Acting Justice Greg Curtin found last October that the 2018-2020 ads spruiking the 430-unit development’s proximity to the proposed light rail line had conveyed that the transport project had been approved and the location of the Woden stop had been decided.
In 2019, the ACT Commissioner for Fair Trading initiated proceedings against the joint developers of Grand Central Towers, Geocon and Zapari, as well as their associated companies.
Justice Curtin said in his 2024 finding that the underlying premise of the Commissioner’s case was that the claims in the promotional material allowed higher prices and rental yields to be obtained from the sale of the units than if they had not been made.
The five defendants were Geocon Bowes, Zapari, Bowe Street Developments, GRE Sales Pty Ltd and GZ Developments Pty Ltd.
Grand Central Towers developers Nick Georgalis and Nick Skepev are directors of GZ Developments.
In a decision dated 29 April, Justice Curtin found only GRE Sales and GZ Developments had breached Australian Consumer Law, but only because it could not be proven that the others were principals for the acts of their alleged agent, GZ.
He ordered that GZ Developments and GRE Sales each pay a penalty of $3,225,000.
Justice Curtin said concerning the rental yield claim that “the desire to maximise profit would seem to have won out over commercial ethics and legal obligations.”
As a whole the conduct of those making all the claims was “cavalier to say the least, and was disdainful, contemptuous and scornful of consumers”.
The units were marketed under the brand names “Geocon” and “Zapari”.
The promotional material consisted of two billboards, a 36-page brochure, a flyer, a video and emails.
Grand Central Towers developers Nick Georgalis and Nick Skepev are directors of GZ Developments. Photo: Michelle Kroll.
Justice Curtin found that the breaches included saying light rail would be extended to Woden Town Centre, and/or stop adjacent or near the Grand Central Towers site, that the travel time to the city would be under 10 minutes and/or that the frequency of service would be every five minutes and that a unit buyer would obtain a 7 per cent gross rental yield.
GRE and GZ were also found to be in breach for stating that the light rail to Woden Town Centre had received planning approval, but this did not incur a penalty under consumer law.
In his 2024 decision, Justice Curtin described the contents of the billboards as “half-truths”.
They included a photograph of the proposed development, with the words “YOUR CANBERRA METRO TERMINAL STOPS HERE”, above a colour image of a red Canberra Metro light rail vehicle.
“The message conveyed by the billboards went further than a ‘proposal’,” Justice Curtin said.
“There were no qualifying words or images on the billboards which conveyed that the light rail, and the position of the light rail stop, was ‘proposed’ rather than certain.”
The brochure’s express words “with the approval of Stage 2 of the light rail” and “1 minute to Woden bus terminal & Future Light Rail Terminal” together with the photographs, images and maps “conveyed to the reasonable consumer that, as far as the necessary approval process was concerned, every necessary approval had been granted”, Justice Curtin said.
Justice Curtin said a disclaimer in the brochure was utterly ineffective.
The defendants contended that there were reasonable grounds for claiming that these things would happen in the future; however, Justice Curtin stated that the commitment from the ACT Government to extend light rail to Woden did not amount to certainty.
“The simple point was that the construction of Stage 2B may not have eventuated because it may not have secured one of the necessary approvals, or an unknown technical restraint was discovered, or the Liberal opposition won either or both of the October 2020 or 2024 elections,” he said.
Stage 2B is yet to be approved, but the ACT Government expects to start construction in 2028 when Stage 2A to Commonwealth Park is due to be up and running. The government is allowing five years for the project to be completed.
