Toyama Pty Ltd v Landmark Building Developments Pty Ltd - [2006] NSWSC 83

Reported Decision:
62 ATR 73
197 FLR 74

New South Wales

Supreme Court

CITATION: Toyama Pty Ltd v Landmark Building Developments Pty Ltd [2006] NSWSC 83

HEARING DATE(S): 15/06/05, 16/06/05, 06/07/05, 07/07/05

JUDGMENT DATE :
28 February 2006

JURISDICTION: Equity Division

JUDGMENT OF: White J

DECISION: Order that the defendant’s notice of motion filed on 13 August 2004 be dismissed and that the defendant pay the costs of the respondents to that notice of motion.

CATCHWORDS: TAXATION – Respondents appointed trustees for sale of land – Land was a development site containing a disused house – Respondents described sale as a taxable supply in contract – Beneficiary claimed sale was not a taxable supply and claimed equitable compensation for breach of trust – Whether trustees for sale carried on an enterprise – Whether sale was of residential premises to be used predominantly for residential accommodation and input taxed – A New Tax System (Goods and Services Tax) Act 1999, ss 9-5, 9-30, 40-65(1) considered. - TRUSTS AND TRUSTEES – Whether respondents acted with due care and diligence – Whether respondents acted in breach of trust – Respondents’ claim for remuneration considered.

LEGISLATION CITED: Conveyancing Act 1919 (NSW)
A New Tax System (Goods & Services Tax) Act 1999 (Cth)
Trustee Act 1925 (NSW)
Land Acquisition (Just Terms Compensation) Act 1991 (NSW)

CASES CITED: Fouche v Superannuation Fund Board (1952) 88 CLR 609
CSR Ltd v Hornsby Shire Council [2004] NSWSC 946
Rolls v Miller (1884) 27 Ch D 71
Hyde v Sullivan (1955) 56 SR (NSW) 113
Hope v Bathurst City Council (1980) 144 CLR 1
Fasold v Roberts (1997) 70 FCR 489
Durant v Greiner (1990) 21 NSWLR 119
Northern Engineering Pty Limited v Federal Commissioner of Taxation (1979) 42 FLR 301; 29 ALR 563
Marana Holdings Pty Ltd v Commissioner of Taxation (2004) 214 ALR 190
National Trustees Executors & Agency Company of Australasia Ltd v General Finance Co of Australasia Ltd [1905] AC 373
Jacobs, Law of Trusts in Australia, 6 ed, para [1718]
Application of Sutherland (2004) 50 ACSR 297; 22 ACLC 1326

PARTIES: Toyama Pty Limited
v
Landmark Building Developments Pty Limited;
Landmark Building Developments Pty Limited
v
Stanislaus Anthony Carroll & Anor

FILE NUMBER(S): SC 4541/02

COUNSEL: Plaintiff: Dr C Birch SC
Defendant: Mr B W Rayment QC, K J Smark

SOLICITORS: Plaintiff: Cameron Gillingham Boyd
Defendant: Proctor & Associates
Stanislaus Anthony Carroll: Bartier Perry

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WHITE J

Tuesday, 28 February 2006

4541/02 Toyama Pty Limited v Landmark Building Developments Pty Limited; Landmark Building Developments Pty Limited v Stanislaus Anthony Carroll & Anor

JUDGMENT

1 HIS HONOUR: This is an application for equitable compensation for breach of trust.

2 The respondents to the application, Messrs Carroll and MacDonald, were appointed pursuant to s 66G of the Conveyancing Act 1919 (NSW) as trustees for sale of land at 5 Laman Street, Nelson Bay. The applicant, Landmark Building Development Pty Limited (“Landmark”), and the…

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: [2006] NSWSC 83
Decision Date: 28 February 2006

CaseChat Overview and Summary

Toyama Pty Ltd sought compensation from Landmark Building Developments Pty Ltd for the sale of a development site containing a disused house. The respondents were appointed as trustees for the sale of the property. The sale contract explicitly described the sale as a taxable supply. The beneficiary, however, contested that the sale was not a taxable supply and sought equitable compensation for the alleged breach of trust. The central legal issues involved determining whether the trustees for sale were conducting an enterprise and whether the sale was of residential premises to be used predominantly for residential accommodation, which would make it an input taxed supply. Relevant sections of the A New Tax System (Goods and Services Tax) Act 1999 were examined, including sections 9-5, 9-30, and 40-65(1). The court needed to address these issues to resolve the dispute.

The court examined whether the trustees for sale were carrying on an enterprise and whether the sale was of residential premises to be used predominantly for residential accommodation. The primary focus was on the application of the relevant GST legislation. The court found that the trustees were carrying on an enterprise, as they had engaged in the sale of the property for profit. Additionally, the sale was not of residential premises to be used predominantly for residential accommodation, thus it did not qualify for the input taxed supply exemption. The court ruled that the sale was a taxable supply, confirming the respondents' original classification in the sale contract.

The court also considered whether the respondents acted with due care and diligence and if they breached their trust duties. The beneficiary claimed compensation for the breach of trust, alleging that the respondents failed to act in the best interests of the beneficiary. The court found that the respondents had acted with due care and diligence and did not breach their trust duties. Consequently, the beneficiary's claim for equitable compensation was dismissed. The court further addressed the respondents' claim for remuneration, finding that it was reasonable and properly owed.

Ultimately, the court dismissed the beneficiary's claim for equitable compensation and upheld the sale as a taxable supply. The court ruled that the respondents had acted properly in their capacity as trustees for sale and were entitled to their remuneration.

Orders