Duoedge Pty Ltd v Leong - [2013] VSC 36

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 1765 of 2012

DUOEDGE PTY LTD (ACN 094 353 870)	Appellant
v
SIMON LEONG and OCMC PTY LTD (ACN 074 953 870)	Respondents

---

JUDGE:	DIXON J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	23 OCTOBER 2012
DATE OF JUDGMENT:	13 FEBRUARY 2013
CASE MAY BE CITED AS:	DUOEDGE PTY LTD v LEONG
MEDIUM NEUTRAL CITATION:	[2013] VSC 36

---

CONTRACT – Appeal under s 109 of the Magistrates Courts Act 1989 (Vic) – Construction of terms - Contract for sale of real estate – Obligation to remit any GST on the sale – Whether 1/11^th of the contract price refundable because no taxable supply – Whether terms of contract ambiguous or susceptible to more than one meaning - Magistrate found implied term - Rectification of contract ordered – Whether finding of agreement or common intention not reflected in written terms made or open to be made - Whether magistrate erred in law.

---

APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr J K Arthur	Mackinnon Jacobs Horton & Irving
For the Respondents	Mr R A Harris	Robyn Calder

HIS HONOUR:

Background

On 3 September 2009, Mr Simon Leong purchased from Duoedge Pty Ltd a property at 196 Hull Road, Mooroolbark for a price specified in the contract as ‘$916,000 GST inclusive’. Mr Leong is the director of OCMC Pty Ltd which intended to develop the land. OCMC was later nominated by Mr Leong as purchaser.

On 27 October 2009, at OCMC’s request, Duoedge provided it with a tax invoice for the sale of the property which specified the following breakdown:

To Contract/Purchase Price  $832,727.27
PLUS GST  $ 83,272.73
Total payable  $916,000.00

On 10 November, 2009 the contract settled.

OCMC commenced its development and in 2010 submitted a Business Activity Statement (BAS) for the 2009 fourth quarter that claimed a GST input tax credit of $83,272.00. On 12 May 2010, the Australian Taxation Office revised OCMC’s BAS rejecting its claimed entitlement to an input tax credit for the GST component of the purchase from Duoedge.

Mr Leong and OCMC contended successfully before a magistrate for an entitlement to a refund from Duoedge of one eleventh of the purchase price. The magistrate held that the contract contained an implied term entitling Mr Leong and OCMC to that refund and ordered rectification of the contract and payment of the sum of $83,272.73 by Duoedge to OCMC.

Duoedge now contends that the magistrate erred and appeals to this court under s 109 of the Magistrates’ Court Act 1989.

Issues

Duoedge’s Notice of Appeal raises many grounds, but the issues are these:

(a)The magistrate erred in law in finding that there was an implied term of the contract that, if GST did not apply to the sale, Duoedge would refund the GST amount of $83,272.73.
(b)There was insufficient foundation for rectification of the contract and the magistrate erred in law by granting rectification on the basis that both parties believed…

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 Duoedge Pty Ltd v Leong

Details

AGLC: Duoedge Pty Ltd v Leong [2013] VSC 36
Case: [2013] VSC 36
Decision Date: 13 FEBRUARY 2013

CaseChat Overview and Summary

In Duoedge Pty Ltd v Leong, the dispute arose from a contract for the sale of real estate. The primary issue before the court was the construction of the terms of the contract, specifically whether one-eleventh of the contract price was refundable due to the sale not constituting a taxable supply. The case involved an appeal under section 109 of the Magistrates Courts Act 1989 (Vic), where the original decision was made by a magistrate who ordered rectification of the contract, finding an implied term.

The court was required to determine whether the terms of the contract were ambiguous or susceptible to more than one meaning, and whether the magistrate's finding of an agreement or common intention not reflected in the written terms was justified. The appellant, Duoedge Pty Ltd, argued that the contract did not contain any term regarding the refund of GST and that the magistrate had erred in law by implying such a term. The respondent, Leong, contended that the contract was ambiguous and that the court should have upheld the magistrate's decision.

The court held that the terms of the contract were not ambiguous and that there was no basis for the magistrate's finding of an implied term. The court found that the magistrate had erred in law by implying a term that was not supported by the evidence or the contract itself. Consequently, the appeal was allowed, and the order for rectification was set aside. The court clarified that there was no provision in the contract for the refund of GST and that the magistrate's decision was not supported by the terms of the contract or the applicable law.

Orders