Wynn Realisation Ltd v Vogue Holdings Inc [1999] EWCA Civ 1087 (24 March 1999)

Wynn Realisation Ltd v Vogue Holdings Inc [1999] EWCA Civ 1087 (24 March 1999)

The words 'exclusive of VAT' in clause 2(a) of the contract must be given their ordinary meaning, which is that if VAT is payable, it is to be paid by the purchaser in addition to the purchase price. The judge below erred in construing the clause as meaning no VAT would ever be payable by the purchaser. The appeal is allowed and Wynn is entitled to recover the VAT from Vogue.

Citation
[1999] EWCA Civ 1087
Parties
Appellant/plaintiff: Wynn Realisation Ltd (In Administration); Respondent/defendant: Vogue Holdings Inc
Jurisdiction
England and Wales
Judgment Date
24 March 1999
Procedural Posture
Civil Appeal / Appeal From High Court (chancery Division) to Court of Appeal
Outcome
appeal allowed
Legal Topics
Construction of Contract Terms, Value Added Tax (vat) Liability, Sale of Land, Interpretation of 'exclusive of Vat'
Contract Law Tax Law Construction of Contract Terms Value Added Tax (vat) Liability Sale of Land Interpretation of 'exclusive of Vat'

Case Brief

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Parties

Wynn Realisation Ltd (In Administration)

Appellant/plaintiff

Vogue Holdings Inc

Respondent/defendant

Procedural Posture

Civil Appeal / Appeal From High Court (chancery Division) to Court of Appeal

Legal Issues

  1. 1 Whether the contract price for the sale of land was exclusive of VAT such that the purchaser was liable to pay VAT in addition to the purchase price
  2. 2 Proper construction of the phrase 'exclusive of VAT' in the context of the contract

Ratio Decidendi

The words 'exclusive of VAT' in clause 2(a) of the contract must be given their ordinary meaning, which is that if VAT is payable, it is to be paid by the purchaser in addition to the purchase price. The judge below erred in construing the clause as meaning no VAT would ever be payable by the purchaser. The appeal is allowed and Wynn is entitled to recover the VAT from Vogue.

Court Disposition

appeal allowed

Orders

  • Vogue Holdings Inc to pay Wynn Realisation Ltd £107,250 plus interest from 8 March 1991 at the contractually prescribed rate
  • Costs awarded to Wynn Realisation Ltd for both the appeal and the court below