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Victorian Supreme Court

In this case, the parties as well as the court could not comprehend to who was liable for GST on the sale of the land as a condition in the contract was “so obscure and incapable of any definite or precise meaning” as to label which party was to pay the tax.

The court ultimately held that the GST clause was not conditional on the operation of the contract. This means that the parties were not relying on the GST clause when the money switched hands. As a result the GST clause itself was removed from the contract by the court and the vendor was liable for the GST.

This decision should encourage those who are selling or buying a property to ensure that their intentions are clearly documented when it comes to who should pay the GST. Having the proper contracts provided could potentially save this dispute from arising again.

If you would like to discuss this case further, you should contact our property team at Matthews Folbigg on 9635 7966.

Anna Zdrilic

Director, Property and Commercial Groups

Phone:  02 9806 7461


DISCLAIMER: This article is provided to clients and readers for their general information and on a complimentary basis. It contains a brief summary only and should not be relied upon or used as definitive or complete statement of the relevant law.