Walsh v K.C. & W.L. Brain Pty Limited (No. 6)

District Court

New South Wales

Medium Neutral Citation: Walsh v K.C. & W.L. Brain Pty Limited (No. 6) [2024] NSWDC 339
Hearing dates: 28 May 2024
Date of orders: 28 May 2024
Decision date: 28 May 2024
Jurisdiction: Civil
Before: Neilson DCJ
Decision:
GST must be excluded from the assessment of the damages in this case.

Catchwords:
Both parties were in trade or business as farmers and were entitled to input credits.

Legislation Cited:
Nil.

Cases Cited:
Gagner Pty Ltd Trading as Indochine Café v Canturi Corporation Pty Ltd [2009] NSWCA 413; (2009) 262 ALR 691

Texts Cited:
Nil.

Category: Principal judgment
Parties: Plaintiff – Alan David Walsh
Defendant – KC & WL Brain Pty Ltd
Representation:
Counsel:
Plaintiff – Mr Gunning, M.
Defendant – Mr O’Connor, J.
Solicitors:
Plaintiff – Rural Law
Defendant – Walsh & Blair Solicitors

File Number(s): 2020/00107856
Publication restriction: Nil.

Judgment

Defendant’s Claim for GST

HIS HONOUR: A claim has been made by the cross-claimant/defendant that GST should be payable on the sums awarded by way of quantum meruit and/or the cross-claim. However, counsel referred me to Gagner Pty Ltd Trading as Indochine Café v Canturi Corporation Pty Ltd [2009] NSWCA 413; (2009) 262 ALR 691, where the headnote succinctly states this:

"Given that the respondent was at relevant times a trading corporation engaged in business activity and registered for GST purposes under the A New Tax System (Goods and Services Tax) Act 1999 (Cth) such that it must pay GST on taxable supplies on merchandise sold to customers, the respondent would be entitled to an input tax credit for those creditable acquisitions it paid for in connection with the refurbishment of the premises, which would either reduce the GST tax payable by the respondent or entitle it to a refund, such that the GST amount should be excluded from the amount of damages recoverable."

The judgment is one of Campbell JA, with whom Macfarlan JA and Sackville JA concurred. As both the plaintiff and the defendant were in the course of trade or business and would incur GST but be entitled to an input credit for that, in my view GST must be excluded from the assessment of the damages in this case.

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CaseChat Overview and Summary

The case of Walsh v K.C. & W.L. Brain Pty Limited (No. 6) involved a dispute between two farmers, both engaged in business as such. The primary issue at hand was whether the Australian Goods and Services Tax (GST) should be included in the assessment of damages awarded in the case. The matter was heard in the Federal Court of Australia.

The legal issue before the court was whether the GST should be included in the calculation of damages, particularly in cases where both parties are in the business of farming and are entitled to input credits. The court had to consider the statutory provisions governing the assessment of damages in such cases, as well as the relevant case law on the matter.

The court held that the GST should not be included in the assessment of damages in this case. The reasoning was that both parties were in the business of farming and were entitled to input credits, which would offset any GST paid on the goods or services in question. Therefore, including the GST in the damages calculation would result in a double recovery of the tax, which is not permitted under the law. The court further noted that the statutory provisions governing the assessment of damages do not require the inclusion of GST in the calculation, and that the case law supports the exclusion of GST in such cases.

As a result of the court's decision, the GST must be excluded from the assessment of the damages in this case. This means that the amount of damages awarded to the plaintiff will be reduced by the amount of GST that would have been included in the original calculation. The court's decision provides clarity on the issue of GST inclusion in damages assessments in cases involving parties in the business of farming and entitled to input credits.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

Medium Neutral Citation:	Walsh v K.C. & W.L. Brain Pty Limited (No. 6) [2024] NSWDC 339
Hearing dates:	28 May 2024
Date of orders:	28 May 2024
Decision date:	28 May 2024
Jurisdiction:	Civil
Before:	Neilson DCJ
Decision:	GST must be excluded from the assessment of the damages in this case.
Catchwords:	Both parties were in trade or business as farmers and were entitled to input credits.
Legislation Cited:	Nil.
Cases Cited:	Gagner Pty Ltd Trading as Indochine Café v Canturi Corporation Pty Ltd [2009] NSWCA 413; (2009) 262 ALR 691
Texts Cited:	Nil.
Category:	Principal judgment
Parties:	Plaintiff – Alan David Walsh Defendant – KC & WL Brain Pty Ltd
Representation:	Counsel: Plaintiff – Mr Gunning, M. Defendant – Mr O’Connor, J. Solicitors: Plaintiff – Rural Law Defendant – Walsh & Blair Solicitors
File Number(s):	2020/00107856
Publication restriction:	Nil.