K7 Developments Pty Ltd v Abbotsford Estates Pty Ltd - [2021] VSC 422

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PROPERTY LIST

S ECI 2018 00987

K7 Developments Pty Ltd (ACN 163 701 00987)	Plaintiff
v
Abbotsford Estates Pty Ltd (ACN 614 886 958)	Defendant

---

JUDGE:	Forbes J
WHERE HELD:	Melbourne
DATES OF HEARING:	4-6 May 2021
DATE OF JUDGMENT:	15 July 2021
CASE MAY BE CITED AS:	K7 Developments Pty Ltd v Abbotsford Estates Pty Ltd
MEDIUM NEUTRAL CITATION:	[2021] VSC 422

---

CONTRACT – Breach of contract of sale of land – Delayed settlement of contract of sale –Specific performance sought by purchaser - Whether each party was ready, willing and able to settle the contract – Agreement to extend settlement date at request of purchaser but settlement then requested on original date – Whether terms of agreement to extend settlement period govern rights and obligations – Counterclaim seeking damages arising from delayed settlement – Construction of contract - Whether purchaser in default or otherwise required to pay interest when settlement delayed – Sale of land where supply made under the contract was Supply of a Going Concern pursuant to A New Tax System (Goods and Services Tax) Act 1999 (Cth) – Special and General conditions of contract – GST liability when vendor did not continue going concern for the whole of the property – Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 – Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544 – Catley v Watson (1981) V ConvR 54-003 – Foran v Wight (1989) 168 CLR 385 – Carrapetta v Rado [2012] NSWCA 202.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr S. Horgan QC with Mr B. Murphy	White Ellis Lawyers
For the Defendant	Mr D. McAloon	B2B Lawyers

HER HONOUR:

The plaintiff purchased property at 288-298 Johnston St, Abbotsford (the Property) from the defendant at auction on 15 June 2017 and entered into a contract for the sale of land (the Contract) that same day. The settlement date for the transfer of land was to be 15 March 2018. The property was commercially leased at the time and the Contract specified that the sale was of land on which a ‘going concern’ was being carried on. This had GST implications. The Contract specified that the purchase price was plus GST, but that GST was only payable if Special Condition 31 (SC31) applied.

The plaintiff requested an extension of the settlement date anticipating that there may be delay in arrival of funds from overseas. On 15 January 2018, the parties agreed terms for an extension of settlement until 15 May 2018 (extension agreement).

For a variety of reasons, as detailed below, settlement did not occur on 15 March 2018, nor during the period of the extension agreement. Consequently, on 12 June 2018, the defendant issued the plaintiff with a Notice of Default (Default Notice) pursuant to General Condition 27 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.

Continue reading K7 Developments Pty Ltd v Abbotsford Estates Pty Ltd

Details

AGLC: K7 Developments Pty Ltd v Abbotsford Estates Pty Ltd [2021] VSC 422
Case: [2021] VSC 422
Decision Date: 15 July 2021

CaseChat Overview and Summary

The matter before the court involved a dispute between K7 Developments Pty Ltd, the purchaser, and Abbotsford Estates Pty Ltd, the vendor, concerning the sale of land. The primary issue was whether the purchaser was obligated to pay interest to the vendor due to a delay in settlement, and whether the purchaser was in default for not settling on the original date. This dispute arose from a contract of sale of land where the supply was a Sale of a Going Concern under the A New Tax System (Goods and Services Tax) Act 1999 (Cth).

The court had to determine the effect of an agreement to extend the settlement date at the purchaser's request, and whether this agreement governed the parties' rights and obligations. Additionally, the court needed to construe the terms of the contract to ascertain whether the purchaser was in default or required to pay interest when the settlement was delayed. The court considered the special and general conditions of the contract, the case law on delayed settlement, and the liability for GST when the vendor did not continue the going concern for the entire property.

The court found that the purchaser was not in default for requesting settlement on the original date, as the agreement to extend the settlement date at the purchaser's request governed the parties' rights and obligations. The court also determined that the purchaser was not required to pay interest to the vendor due to the delay in settlement. The court held that the vendor's failure to continue the going concern for the entire property resulted in a liability for GST. The court dismissed the vendor's counterclaim for damages arising from the delayed settlement.

The court ordered that the purchaser was not in default for requesting settlement on the original date, and that the purchaser was not required to pay interest to the vendor due to the delay in settlement. The court further ordered that the vendor's liability for GST was determined by their failure to continue the going concern for the entire property.

Orders