The future of a multimillion-dollar residential estate is under threat after a dispute broke out between two developers over the ownership of a 29-centimetre sliver of land separating their properties.
The project involved the creation of an 80-lot subdivision on the edge of Cranbourne's Amstel Golf Club by the Australian International Property Corporation, which would then on-sell a 1.2 hectare lot to a second developer, Nashaat Michael.
But the complicated process of consolidating and then resubdividing seven titles along Cranbourne-Frankston Road hit a snag when Dr Michael disputed the placement of a tree reserve and identified a 29-centimetre "discrepancy" between the original plan and the plan of subdivision.
The fight escalated when Dr Michael refused to remove a caveat over the property, with AIPC launching legal action in the Supreme Court.
"There was no single reason for the difference (i.e. the change did not create an advantage or disadvantage to any party or authority), rather it occurred as the plan of subdivision was 'fine tuned' through the planning process," an affidavit filed by AIPC's solicitors said.
With $5.69 million in land sales inaccessible because settlement has been frozen, AIPC is claiming the delay is costing $1150 a day in interest charges on its financing.
"There is also a risk that the purchasers may seek to withdraw from the contract, as time passes," the affidavit adds.
But solicitors for Dr Michael claim the dispute over the 29-centimetre "discrepancy" and filings for the lawsuit revealed that AIPC materially changed the size of the property he was set to receive.
"Without any prior consent of [Dr Michael] the [plan] reduces the area of the purchased land ... from 1.214 hectares to 0.9859 hectares, which represents a reduction in the area of the land by approximately 18.8 per cent," they allege. "This will significantly affect the value of the land purchased by [Dr Michael] under the contract of sale."
A bid to mediate the dispute has failed and the case will be heard in early December.
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