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

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

The trustees did not breach trust because the sale was correctly described as a taxable supply. The trustees, not the beneficiaries, supplied the land in the course or furtherance of an enterprise constituted by their professional activities as trustees for sale. Although the land contained residential premises, the purchaser intended to demolish the existing buildings and develop the site, and the objective circumstances showed the premises were not to be used predominantly for residential accommodation; the sale was therefore not input taxed under s 40-65(1). In any event, even if that construction were wrong, the trustees acted with the care and diligence of reasonable prudent...

Jurisdiction
Australia
Judgment Date
28 February 2006
Procedural Posture
Application for Equitable Compensation for Breach of Trust Arising From Trustees' Sale of Land and GST Treatment; Trustees Also Sought Judicial Advice and Remuneration. / Judgment on Defendant's Notice of Motion Filed on 13 August 2004.
Outcome
Landmark's notice of motion was dismissed with costs payable to the respondents. The trustees' applications for judicial advice and remuneration were stood over for further consideration.
Legal Topics
['gst Taxable Supply' 'input Taxed Residential Premises' 'enterprise Under GST Legislation' 'trustees for Sale Under S 66 G of the Conveyancing Act 1919 (nsw)' 'breach of Trust' 'trustee Care and Diligence' 'judicial Advice' 'trustee Remuneration and Indemnity']
['taxation' 'trusts and Trustees' 'equity' 'conveyancing'] ['gst Taxable Supply' 'input Taxed Residential Premises' 'enterprise Under GST Legislation' 'trustees for Sale Under S 66 G of the Conveyancing Act 1919 (nsw)' 'breach of Trust' 'trustee Care and Diligence' 'judicial Advice' 'trustee Remuneration and Indemnity']

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Procedural Posture

Application for Equitable Compensation for Breach of Trust Arising From Trustees' Sale of Land and GST Treatment; Trustees Also Sought Judicial Advice and Remuneration. / Judgment on Defendant's Notice of Motion Filed on 13 August 2004.

Legal Issues

  1. 1 ['Whether the trustees were mistaken in describing the sale in the contract as a taxable supply.' 'Whether the sale was made in the course or furtherance of an enterprise carried on by the trustees.' 'Whether the sale was input taxed as a sale of residential premises to be used predominantly for residential accommodation under s 40-65(1) of the GST Act.' 'If the trustees were mistaken, whether the mistake constituted breach of trust or failure to act diligently and prudently.' 'Whether the trustees should be excused under s 85 of the Trustee Act 1925 (NSW) if otherwise liable.' 'What equitable compensation Landmark would be entitled to if liability were established.' 'Whether the trustees should receive remuneration for administering the statutory trust for sale.']

Ratio Decidendi

The trustees did not breach trust because the sale was correctly described as a taxable supply. The trustees, not the beneficiaries, supplied the land in the course or furtherance of an enterprise constituted by their professional activities as trustees for sale. Although the land contained residential premises, the purchaser intended to demolish the existing buildings and develop the site, and the objective circumstances showed the premises were not to be used predominantly for residential accommodation; the sale was therefore not input taxed under s 40-65(1). In any event, even if that construction were wrong, the trustees acted with the care and diligence of reasonable prudent...

Court Disposition

Landmark's notice of motion was dismissed with costs payable to the respondents. The trustees' applications for judicial advice and remuneration were stood over for further consideration.

Orders

  • ["Order that the defendant's notice of motion filed on 13 August 2004 be dismissed." 'Order that the defendant pay the costs of the respondents to that notice of motion.' "Proceedings stood over to deal with the trustees' application for judicial advice about issuing an amended invoice and paying one-eleventh of the...