A & a Property Developers Pty Ltd v MCCA Asset Management Ltd - [2017] VSCA 365

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2016 0161

A & A PROPERTY DEVELOPERS PTY LTD (ABN 153 624 910)	Applicant
v
MCCA ASSET MANAGEMENT LTD (ABN 18 113 728 706) and SANDHURST TRUSTEES LTD (ABN 16 004 030 737) as Trustee for the MCCA PROPERTY FUND	Respondents

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JUDGES:	TATE, OSBORN and KAYE JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	22 August 2017
DATE OF JUDGMENT:	12 December 2017
MEDIUM NEUTRAL CITATION:	[2017] VSCA 365
JUDGMENT APPEALED FROM:	[2016] VSC 653 (Ginnane J)

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CONTRACT – Sale of land – Standard form contract of sale – Liability to pay GST –Insertion of the words ‘GST’ rather than ‘plus GST’ into the relevant box in the contract – Whether judge erred in finding that failure to use correct term meant mechanism for departure from the default position had not been triggered – Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337, Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640, Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, Eureka Operations Pty Ltd v Viva Energy Australia Ltd [2016] VSCA 95, applied – Homburg Houtimport BV v Agrosin Private Ltd [2004] 1 AC 715, Duoedge Pty Ltd v Leong [2013] VSC 36, discussed – Leave to appeal granted – Appeal allowed – Estate Agents (Contracts) Regulations 2008 sch 1, Forms 1 and 2.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr C G Juebner	Obst Legal
For the Respondents	Mr M J Rivette	Blaak & Associates

TATE JA:

Introduction and summary

This proceeding raises the question of whether a contract for the sale of real estate imposed liability upon the vendor or the purchaser to pay any Goods and Services Tax (‘GST’) arising from the transaction.

The judge below, after careful consideration, concluded that the vendor was liable to pay any GST.[1] For the reasons that follow, I have arrived at a different conclusion and consider that the obligation to pay any GST fell upon the purchaser. I would grant leave to appeal and allow the appeal.
[1]A & A Property Developers Pty Ltd v MCCA Asset Management Ltd [2016] VSC 653 [37] (‘Reasons’).

Contract of sale

On 15 June 2016 the applicant, A & A Property Developers Pty Ltd (‘the vendor’), entered into a contract of sale of real estate (‘the contract’) with the first respondent, MCCA Asset Management Ltd (‘the purchaser’), in relation to property at 42 Grant Crescent, Ringwood (‘the land’). After the contract was executed, the purchaser nominated the second respondent, Sandhurst Trustees Ltd (‘Sandhurst’), to receive the conveyance of the land.[2]
[2]MCCA Asset Management Ltd and Sandhurst were jointly represented. In what follows a reference to ‘the purchaser’ is intended to refer to both MCCA Asset Management Ltd and Sandhurst, unless the context reveals otherwise.

The vendor and purchaser used the standard form contract of sale of real estate published by the Law Institute of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] VSCA 365
Decision Date: 12 December 2017

CaseChat Overview and Summary

A & a Property Developers Pty Ltd, the plaintiff, appealed against a decision of the County Court of Victoria, which had ruled in favour of MCCA Asset Management Ltd, the defendant, in a dispute concerning the sale of land. The central issue was whether the insertion of the term ‘GST’ rather than ‘plus GST’ into the relevant box of a standard form contract of sale triggered the mechanism for departure from the default position under the Estate Agents (Contracts) Regulations 2008. The County Court found that it did not, and as a result, the defendant was not liable to pay GST on the sale.

The Court of Appeal considered whether the County Court had erred in concluding that the failure to use the correct term in the contract meant the mechanism for departure from the default position had not been triggered. The Court of Appeal found that the County Court had misapplied the principles established in Codelfa Construction Pty Ltd v State Rail Authority (1982) 149 CLR 337, Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640, and Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104. The Court of Appeal concluded that the County Court had failed to give proper effect to the principle that a contract should be interpreted as a whole and in its commercial context, as established in Homburg Houtimport BV v Agrosin Private Ltd [2004] 1 AC 715 and Duoedge Pty Ltd v Leong [2013] VSC 36. The Court of Appeal found that the use of the term ‘GST’ rather than ‘plus GST’ did in fact trigger the mechanism for departure from the default position under the Estate Agents (Contracts) Regulations 2008.

The Court of Appeal allowed the appeal and set aside the County Court's decision. The Court of Appeal found that the defendant was liable to pay GST on the sale of the land. The Court of Appeal also granted leave to appeal to the Supreme Court of Victoria. The Court of Appeal concluded that the use of the term ‘GST’ rather than ‘plus GST’ in the contract meant that the mechanism for departure from the default position had been triggered, and as a result, the defendant was liable to pay GST on the sale. The Court of Appeal noted that this was a significant decision that would have implications for the interpretation of standard form contracts of sale in Victoria.

Orders