02-05-2025
Canberra developers found to have broken consumer law over light rail, rental yeild advertising in Canberra
Two companies that made false claims about approvals for light rail stops near a luxury apartment building in Woden have been fined more than $3 million each under consumer laws.
The court found GRE Sales — also known as Geocon — and GZ Developments — ultimately owned by Zapari — had broken the law by suggesting light rail to Woden Town Centre had been approved and would stop near the Grand Central Towers.
And a further claim suggested buyers would obtain a seven per cent gross rental yield.
The claims were advertised on billboards, flyers and a promotional video.
The court found these were misleading and at odds with Australian consumer laws.
The advertising bore the brand names of Geocon and Zapari.
'Disdainful, contemptuous and scornful'
In his judgment Acting Justice Greg Curtin said: "The desire to maximise profit would seem to have won out over commercial ethics and legal obligations".
Although he only fined GRE Sales and GZ Developments, he also took aim at principles in the head companies.
"Mr Nick Georgalis and Mr [Nick] Skepev, via other corporate vehicles utilising the brand names 'Geocon' and 'Zapari', are prominent developers of residential real estate in the Australian Capital Territory,"
Acting Justice Curtin said.
"Mr Nick Georgalis and Mr Skepev were intimately involved with the travel times representations, although it is fair to say Mr Georgalis was more involved than Mr Skepev.
The Woden development Grand Central Towers was completed in 2021.
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ABC News
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"They were less involved, although directly so, with the light rail location representation.
"They had less involvement with the rental yield representation, but they knew of its existence.
"Thus, the ultimate owners of GZ and GRE were involved in the representations."
Acting Justice Curtin listed all those involved in the misrepresentations including two senior managers, who the judgment says have both left the companies.
"Taken as a whole, the conduct of GZ, GRE, Messrs Nick Georgalis, Skepev, Stephens and Micalos concerning the representations was cavalier to say the least, and was disdainful, contemptuous and scornful of consumers and the legal requirement of having reasonable grounds for the making of representations as to future matters," he said.
"
The desire to maximise profit would seem to have won out over commercial ethics and legal obligations.
"
Acting Justice Curtin also said on the balance of probabilities some financial loss was suffered by some buyers.
He said he accepted the Fair Trading Commission's case that the misleading representations brought higher prices, than if they hadn't been made.
"The evidence established that GRE and GZ's internal calculations of gross rental return were less than seven persons for most of the units, yet GZ and GRE represented that all units would achieve seven per cent," Acting Justice Curtin said.
Acting Justice Curtin in the end only targeted GZ Developments and GRE Sales, fining them each $3,225,000, and ordering them to pay costs.
