Lloyd v Belconnen Lakeview Pty Ltd [2019] FCA 2177

Lloyd v Belconnen Lakeview Pty Ltd [2019] FCA 2177

The court found that applicants who paid an amount referable to GST, where the supply was ultimately input taxed and the vendor not liable to remit GST, were entitled to restitution to the extent the GST component was not offset by input tax credits repaid by the vendor. Contracts allocated GST risk to the vendor but, where contractual terms did not exclude restitution and part of the consideration failed, restitution was ordered. Misleading and deceptive conduct was also found in relation to nondisclosure or misstatements about GST liability, and statutory compensation for loss of opportunity to negotiate was awarded in some cases, discounted for probability. Unconscionable conduct...

Parties
Applicant: Susan Margaret Lloyd; First Respondent: Belconnen Lake View Pty Ltd ACN 127 550 029; Second Respondent: John Kinloch Hindmarsh; Third Respondent: Gerald John Ryan; Solicitor for the Applicants: Corrs Chambers Westgarth; Solicitor for the Respondents in Nsd1417/2017: HWL Ebsworth Lawyers; First Applicant: Hassan El-Banna El-Zein; Second Applicant: Deborah Margaret El-Zein; Third Applicant: Glenn Andrew Eppelstun; Fourth Applicant: Atsuko Eppelstun; First Respondent (nsd1555/2018), First Cross Claimant: Barton Nine Pty Limited AFT The Barton Nine Settlement ACN 143 616 693; Second Respondent (nsd1555/2018), Second Cross Claimant: 13.9 Barton Pty Limited AFT the 13.9 Barton Commercial Property Trust ACN 143 733 706; Solicitor for the Respondents in Nsd1555/2018: K & L Gates; Interested Person: Ms Kim Ward
Jurisdiction
Australia
Judgment Date
20 December 2019
Procedural Posture
Representative Proceeding (class Action) / Initial Trial—determination of Individual Applicant Claims and Common Issues
Outcome
Mixed—applicants succeeded in restitution and/or statutory compensation claims; some claims dismissed.
Legal Topics
Money Had and Received, Failure of Consideration, Mistake, Misleading and Deceptive Conduct, Unconscionable Conduct, Input Taxed Supply, GST on Real Property, Measure of Damages, Loss of Commercial Opportunity
Contract Law Restitution Consumer Law Taxation Law Equity Money Had and Received Failure of Consideration Mistake +6 more

Case Brief

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Parties

Susan Margaret Lloyd

Applicant

Belconnen Lake View Pty Ltd ACN 127 550 029

First Respondent

John Kinloch Hindmarsh

Second Respondent

Gerald John Ryan

Third Respondent

Corrs Chambers Westgarth

Solicitor for the Applicants

HWL Ebsworth Lawyers

Solicitor for the Respondents in Nsd1417/2017

Hassan El-Banna El-Zein

First Applicant

Deborah Margaret El-Zein

Second Applicant

Glenn Andrew Eppelstun

Third Applicant

Atsuko Eppelstun

Fourth Applicant

Barton Nine Pty Limited AFT The Barton Nine Settlement ACN 143 616 693

First Respondent (nsd1555/2018), First Cross Claimant

13.9 Barton Pty Limited AFT the 13.9 Barton Commercial Property Trust ACN 143 733 706

Second Respondent (nsd1555/2018), Second Cross Claimant

K & L Gates

Solicitor for the Respondents in Nsd1555/2018

Ms Kim Ward

Interested Person

Procedural Posture

Representative Proceeding (class Action) / Initial Trial—determination of Individual Applicant Claims and Common Issues

Legal Issues

  1. 1 Whether contract price included a GST component as a distinct and severable part
  2. 2 Whether vendors were liable to pay GST and/or return the GST portion to purchasers
  3. 3 Whether contracts misrepresented GST liability

Ratio Decidendi

The court found that applicants who paid an amount referable to GST, where the supply was ultimately input taxed and the vendor not liable to remit GST, were entitled to restitution to the extent the GST component was not offset by input tax credits repaid by the vendor. Contracts allocated GST risk to the vendor but, where contractual terms did not exclude restitution and part of the consideration failed, restitution was ordered. Misleading and deceptive conduct was also found in relation to nondisclosure or misstatements about GST liability, and statutory compensation for loss of opportunity to negotiate was awarded in some cases, discounted for probability. Unconscionable conduct...

Court Disposition

Mixed—applicants succeeded in restitution and/or statutory compensation claims; some claims dismissed.

Orders

  • The parties are to provide to the Associate to Justice Lee agreed or competing Short Minutes of Order with a timetable for exchange of further submissions and proposed orders, including orders pursuant to s 33ZB Federal Court of Australia Act 1976 (Cth) by 3pm on 24 December 2019.