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Prowl Pty Ltd v DL Brookvale Pty Ltd

Prowl Pty Ltd v DL Brookvale Pty Ltd

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Case Copied 14 August 2018 81 min read

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Supreme Court

New South Wales

Medium Neutral Citation: Prowl Pty Ltd v DL Brookvale Pty Ltd [2018] NSWSC 1255
Hearing dates: 5 to 7 March 2018, 4 May 2018, 14 June 2018
Decision date: 14 August 2018
Jurisdiction: Equity
Before: Robb J
Decision:
See paragraphs 311 to 314

Catchwords:
CONTRACTS — Construction — Interpretation — Whether the purchaser was required to pay the vendor the amount of GST payable by the vendor in respect of the taxable supply of the property — the meaning of “inclusive” and “exclusive” of GST in a contract for the sale of land — the proper construction of the contract does not require the purchaser to pay the GST payable by the vendor

CONTRACTS — Particular parties — vendor and purchaser CONTRACTS — general contractual principles — construction and interpretation of contracts CONTRACTS — Construction — Extrinsic evidence — Prior negotiations
CONTRACTS — Rectification — whether the plaintiff is entitled to rectification of the contract — the plaintiff is entitled to rectification of the contract CONTRACTS — Rectification — Intention — Common intention — whether the parties were shown to have had a "common intention" that was not reflected in the contract — whether the vendor and purchaser entered into the contract under a common mistake that the contract required the purchaser to pay the GST payable on the purchase price of the property
Legislation Cited: A New Tax System (Goods & Services Tax) Act 1999 (Cth)
Cases Cited: Igloo Homes Pty Ltd v Sammut Constructions Pty Ltd [2004] NSWSC 1213
Igloo Homes Pty Ltd v Sammut Constructions Pty Ltd [2005] NSWCA 280
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37
Victoria v Tatts Group Ltd [2016] HCA 5; (2016) 328 ALR 564
Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47
Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12; (2017) 343 ALR 58
Ryan v Fergerson (1909) 8 CLR 731
Walker v Citigroup Global Markets Australia Pty Ltd [2006] FCAFC 101; (2006) 233 ALR 687
Homburg Houtimport BV v Agrosin Private Ltd [2004] 1 AC 715
Bedroff Pty Ltd v Rennie [2002] NSWSC 928
Cherry v Steele-Park [2017] NSWCA 295; (2017) 351 ALR 521
SAMM Property Holdings Pty Ltd v Shaye Properties Pty Ltd [2016] NSWSC 362
SAMM Property Holdings Pty Ltd v Shaye Properties Pty Ltd [2017] NSWCA 132; (2017) 345 ALR 633
Powell General Sheet Metal Pty Ltd v Autopak Nominees Pty Ltd [2011] NSWSC 321
Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8
Texts Cited: Cheshire & Fifoot, Law of Contract 11th Australian Edition
Category: Principal judgment
Parties: Prowl Pty Ltd (Plaintiff)
DL Brookvale Pty Ltd (First Defendant)
Raymond Touma (Second Defendant)
Clint Willoughby (Third Defendant)
Representation:
Counsel:
T N Faulkner SC and J…

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: [2018] NSWSC 1255
Decision Date: 14 August 2018

CaseChat Overview and Summary

Prowl Pty Ltd commenced proceedings against DL Brookvale Pty Ltd in relation to the sale of a property. The primary dispute was whether the purchaser was required to pay the vendor the amount of GST payable by the vendor in respect of the taxable supply of the property. The case was heard in the Supreme Court of New South Wales. The legal issues before the court included the interpretation of the contract terms regarding the GST and whether there was a common mistake by the parties in relation to the GST obligation.

The court examined the contract language and the context in which it was used, considering whether the terms "inclusive" and "exclusive" of GST were clear and unambiguous. It was determined that the contract did not require the purchaser to pay the GST. The court also considered extrinsic evidence, including prior negotiations between the parties, to understand the common intention of the parties at the time of the contract. The court found that the parties had a common intention that was not accurately reflected in the contract, leading to a rectification of the contract. The court concluded that the purchaser was not required to pay the GST and that the contract should be rectified to reflect the parties' true intentions.

The Supreme Court of New South Wales ordered that the contract be rectified to remove the requirement for the purchaser to pay the GST. The court also determined that Prowl Pty Ltd was entitled to rectification of the contract based on the common intention of the parties. The final orders included the rectification of the contract to accurately reflect the parties' intentions and a declaration that Prowl Pty Ltd was not required to pay the GST to DL Brookvale Pty Ltd.

Orders