No Worries Management v Dolman - [2004] QSC 153

SUPREME COURT OF QUEENSLAND

CITATION:

No Worries Management v Dolman [2004] QSC 153

PARTIES:

NO WORRIES MANAGEMENT PTY LTD
(applicant)
v
DAVID REGINALD DOLMAN
(respondent)

FILE NO:

S2800 of 2004

DIVISION:

Trial Division

PROCEEDING:

Application

DELIVERED ON:

14 May 2004

DELIVERED AT:

Brisbane

HEARING DATE:

8 April 2004

JUDGE:

Wilson J

ORDERS:

a declaration that, on the proper construction of the lease dated 7 June 1999 between the respondent as lessor and the applicant as lessee ("the lease") over the premises described as Lot 14 on SP118437 in the County of Solander, Parish of Salisbury being Title Reference 50267162 also known as Unit 14 at "The Newport on Macrossan" ("the premises") and in particular clause 1.1, 3 and 4 of the lease, the rental payable by the lessee to the lessor under clause 3.1 is, and from 1 July 2000 was, an amount calculated after deduction of any Goods and Services Tax, under the A New Tax System (Goods & Services Tax) Act 1999 (Commonwealth), payable by the lessee in respect of the supply of the premises to a sub-tenant;1.

that the respondent pay the applicant's costs of and incidental to the application to be assessed on the standard basis.2.

CATCHWORDS:

LANDLORD AND TENANT – FORM AND CONTENTS OF LEASE – CONSTRUCTION OF LEASES - Intention of the parties – where lessee sub-lets property to short-term holiday tenants – where GST is payable on letting fees – whether GST is a “deductible expense” under the lease – whether burden of payable GST should be borne by the lessee or lessor

Antaios Compania Naviera SA v Salen Rederierna AB [1985] AC 191 Followed

Geroff v CAPD Enterprises Pty Ltd [2003] QCA 187 Cited

Wickman Machine Tool Sales Ltd v L Schuler AG [1974] AC 235 Applied

COUNSEL:

RJ Douglas SC and AM Musgrave for the applicant
D Marks for the respondent

SOLICITORS:

Mahoney Lawyers for the applicant
Hunt & Hunt for the respondent

WILSON J: This is an application for a declaration as to the proper construction of a lease.

There is a resort complex comprised of 14 accommodation units in Macrossan Street, Port Douglas known as “The Newport on Macrossan”. The applicant is the caretaker/manager of the complex under an agreement with the body corporate, as well as the lessee of the various units from their respective owners. The respondent is the owner of unit 14, which he has leased to the applicant for a term of 5 years from 7 June 1999. The applicant sublets unit 14 (and the other units) to short term holiday tenants.

The lease of unit 14 between the respondent as owner and the applicant as lessee was entered into before the introduction of the goods and services tax (“GST”). The legislation under which GST is levied and collected[1] commenced on 1 July 2000. The applicant (as supplier) is liable to pay GST on holiday lettings. The GST is embedded in the price the applicant charges holiday tenants: under the GST law it…

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 No Worries Management v Dolman

Details

AGLC: No Worries Management v Dolman [2004] QSC 153
Case: [2004] QSC 153
Decision Date: 14 May 2004

CaseChat Overview and Summary

The matter of No Worries Management v Dolman involved a dispute between the respondent, Dolman, the lessor, and the applicant, No Worries Management, the lessee, over the interpretation of the lease dated 7 June 1999. The lease pertained to premises described as Lot 14 on SP118437 in the County of Solander, Parish of Salisbury, also known as Unit 14 at "The Newport on Macrossan". The primary issue in the case was whether the burden of Goods and Services Tax (GST) payable by the lessee on letting fees should be deducted from the rental amount payable to the lessor or whether it should be borne by the lessee alone. This interpretation hinged on the proper construction of clauses 1.1, 3, and 4 of the lease.

The court was tasked with determining whether the GST was considered a "deductible expense" under the lease. The central legal issue revolved around the intention of the parties at the time of entering into the lease. The court had to ascertain whether the parties intended for the GST to be deducted from the rental amount or whether it was to be borne by the lessee as an additional cost of sub-letting the property to short-term holiday tenants. The court examined the language of the lease, the nature of the agreement, and the obligations of both parties under the lease terms.

After thorough consideration, the court found that the rental payable by the lessee to the lessor was to be calculated after deducting any GST payable by the lessee in respect of the supply of the premises to a sub-tenant. The court held that the intention of the parties, as evidenced by the lease, was that the GST should be deducted from the rental amount. Consequently, the court declared that the rental amount should be calculated net of the GST. The court also ordered that the respondent pay the applicant's costs of and incidental to the application, to be assessed on the standard basis.

Orders

Orders of the court

a declaration that, on the proper construction of the lease dated 7 June 1999 between the respondent as lessor and the applicant as lessee ("the lease") over the premises described as Lot 14 on SP118437 in the County of Solander, Parish of Salisbury being Title Reference 50267162 also known as Unit 14 at "The Newport on Macrossan" ("the premises") and in particular clause 1.1, 3 and 4 of the lease, the rental payable by the lessee to the lessor under clause 3.1 is, and from 1 July 2000 was, an amount calculated after deduction of any Goods and Services Tax, under the A New Tax System (Goods & Services Tax) Act 1999 (Commonwealth), payable by the lessee in respect of the supply of the premises to a sub-tenant;1.

that the respondent pay the applicant's costs of and incidental to the application to be assessed on the standard basis.2.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	No Worries Management v Dolman [2004] QSC 153
PARTIES:	NO WORRIES MANAGEMENT PTY LTD (applicant) v DAVID REGINALD DOLMAN (respondent)
FILE NO:	S2800 of 2004
DIVISION:	Trial Division
PROCEEDING:	Application
DELIVERED ON:	14 May 2004
DELIVERED AT:	Brisbane
HEARING DATE:	8 April 2004
JUDGE:	Wilson J
ORDERS:	a declaration that, on the proper construction of the lease dated 7 June 1999 between the respondent as lessor and the applicant as lessee ("the lease") over the premises described as Lot 14 on SP118437 in the County of Solander, Parish of Salisbury being Title Reference 50267162 also known as Unit 14 at "The Newport on Macrossan" ("the premises") and in particular clause 1.1, 3 and 4 of the lease, the rental payable by the lessee to the lessor under clause 3.1 is, and from 1 July 2000 was, an amount calculated after deduction of any Goods and Services Tax, under the A New Tax System (Goods & Services Tax) Act 1999 (Commonwealth), payable by the lessee in respect of the supply of the premises to a sub-tenant;1. that the respondent pay the applicant's costs of and incidental to the application to be assessed on the standard basis.2.
CATCHWORDS:	LANDLORD AND TENANT – FORM AND CONTENTS OF LEASE – CONSTRUCTION OF LEASES - Intention of the parties – where lessee sub-lets property to short-term holiday tenants – where GST is payable on letting fees – whether GST is a “deductible expense” under the lease – whether burden of payable GST should be borne by the lessee or lessor Antaios Compania Naviera SA v Salen Rederierna AB [1985] AC 191 Followed Geroff v CAPD Enterprises Pty Ltd [2003] QCA 187 Cited Wickman Machine Tool Sales Ltd v L Schuler AG [1974] AC 235 Applied
COUNSEL:	RJ Douglas SC and AM Musgrave for the applicant D Marks for the respondent
SOLICITORS:	Mahoney Lawyers for the applicant Hunt & Hunt for the respondent