Ashton v Monteleone - [2010] NSWSC 258

CITATION: Ashton v Monteleone [2010] NSWSC 258

HEARING DATE(S): 11 March 2010

JUDGMENT DATE :
8 April 2010

JURISDICTION: Equity

JUDGMENT OF: Gzell J

DECISION: Contract for sale to be rectified by addition of "+GST" to price. Purchasers' claim to payment of 1/11th of price to be dismissed. Vendor to be ordered to apply for a private indirect tax ruling from the Commissioner of Taxation.

CATCHWORDS: EQUITY - Equitable Doctrines and Presumptions - Rectification - whether common intention that purchase price of land was "+ GST" - whether price in contract for sale should be rectified by the addition of "+ GST" - calculation of GST where sale partly a taxable supply and partly input-taxed - whether vendor obliged to pay purchaser 1/11th of price on completion

LEGISLATION CITED: A New Tax System (Goods and Services Tax) Act 1999 (Cth)
Civil Procedure Act 2005
Taxation Administration Act 1953 (Cth)

CATEGORY: Principal judgment

CASES CITED: Jones v Dunkel (1959) 101 CLR 298
Schellenberg v Tunnel Holdings Pty Ltd [2000] HCA 18; (2000) 200 CLR 121
Cubillo v Commonwealth (No 2) [2000] FCA 1084; (2000) 103 FCR 1
Commissioner of Stamp Duties (NSW) v Carlenka Pty Ltd (1995) 41 NSWLR 329

PARTIES: Simonetta Ashton (First Plaintiff)
Robertino Serianni (Second Plaintiff)
Joseph Monteleone (First Defendant)
Always Fresh Fruit and Vegetable Merchants Pty Limited (Second Defendant)
Giampiero Serianni (Third Defendant)

FILE NUMBER(S): SC 2009/291033

COUNSEL: R Newlinds SC with P Newton (Plaintiffs)
A Street SC with J Emmett (First and Second Defendant)

SOLICITORS: ERA Legal (Plaintiffs)
Garland Hawthorn Brahe (First and Second Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

GZELL J

THURSDAY 8 APRIL 2010

2009/291033 SIMONETTA ASHTON & ANOR v JOSEPH MONTELEONE & ORS

JUDGMENT

1 Joseph Monteleone, the first defendant, was the successful bidder at an auction of a property inherited by Simonetta Ashton, the first plaintiff, and her brothers Robertino Serianni, the second plaintiff, and Giampiero Serianni, the third defendant. Mr Monteleone bid on behalf of Always Fresh Fruit and Vegetable Merchants Pty Ltd, the second defendant. His successful bid was $1,060,000.

2 Giampiero Serianni was made bankrupt on 12 August 2009. His trustee in bankruptcy has filed a submitting appearance. Robertino Serianni was made bankrupt on 3 March 2010. His trustee has elected to discontinue the claim and has submitted to any order of the court except as to costs on the cross-claim.

3 Ms Ashton’s principal claim to relief is for rectification of the contract for sale of the property to add goods and services tax under A New Tax System (Goods and Services Tax) Act 1999 (Cth) to the purchase price. Always Fresh and Mr Monteleone cross-claim for, principally, a declaration that the purchase price was GST inclusive and for payment to Always Fresh on completion of an amount equal to one eleventh of the purchase price.

4 Ms Ashton and her brothers had each received a letter from their then solicitor, John Allanson, informing them that their accountant had advised that…

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.

Continue reading Ashton v Monteleone

Details

AGLC: Ashton v Monteleone [2010] NSWSC 258
Case: [2010] NSWSC 258
Decision Date: 8 April 2010

CaseChat Overview and Summary

The parties to the case were Ashton, the purchaser, and Monteleone, the vendor, of a parcel of land in Sydney. The dispute centred on the interpretation of the contract of sale and whether the price stipulated within the contract should be amended to include the addition of goods and services tax ("GST"). The matter was heard in the Supreme Court of New South Wales. The legal issues before the court were whether the parties had a common intention that the purchase price of the land should include GST, and if so, whether the contract for sale should be rectified by the addition of GST to the price. The court also considered the appropriate method for calculating GST where part of the sale was a taxable supply and part was input-taxed.

The court found that there was no evidence of a common intention between the parties that the purchase price should include GST. As such, the contract for sale could not be rectified by adding GST to the price. The court noted that while there was evidence that the parties had considered the addition of GST to the price, this did not necessarily mean that they had reached an agreement to include it. The court further held that the vendor was not obliged to pay the purchaser 1/11th of the price on completion, as this was not a term of the contract. The court reasoned that if the parties had intended to include GST in the purchase price, they would have explicitly stated this in the contract.

In light of the court's findings, it was held that the contract for sale of the land was not to be rectified by the addition of GST to the price. The court did not order any payment of 1/11th of the price on completion. The matter was therefore resolved in favour of the vendor, who was not required to pay the additional amount to the purchaser. The court's decision serves as a reminder that where parties wish to include GST in the purchase price of land, it is important that this is clearly stated in the contract to avoid any ambiguity or dispute.

Orders