An apartment developer found to have misled buyers after incorrectly charging GST on their units has won a court battle to overturn a decision to compensate one of its purchasers nearly $30,000.
The Federal Court in December 2019 found Belconnen Lakeview, developer of the Altitude Apartments, was found to have engaged in misleading and deceptive conduct after buyers agreed to pay GST as a portion of the purchase price, but the developer was not liable to pay it due to a loophole in tax legislation at the time and kept the windfall.
The developer had obtained a private binding ruling from the Australian Taxation Office that sales of its units were not taxable supplies but the draft contracts of its unit sales were prepared on the basis they were.
The court also found it was not liable for compensation to all buyers and individuals could make more submissions for claims.
One of the buyers led a class action against the developer and in May last year, she was awarded $29,914 in compensation after the court ruled in her favour regarding misleading or deceptive conduct.
Following that, the developer filed a notice of appeal, prompting the buyer to file a cross appeal.
Two of the developer's officers then filed a cross-cross appeal.
Among the issues dealt with were whether the primary judge erred in the initial findings.
In a recent judgment, the Federal Court rejected the developer's appeal against misleading or deceptive conduct but upheld its challenge that any such conduct caused loss or damage to the buyer.
They found the primary judge erred in concluding the buyer lost an opportunity to renegotiate the contract.
"It was not established that, had [the buyer] been apprised of the true position [that the unit would not be subject to GST] in the period between the date of the contract and the date of settlement, she would have taken steps to renegotiate the purchase price," the court said.
MORE NEWS:
- Private sector pivots to net zero
- List of areas unvaccinated Canberrans cannot visit after Nov 1
- City getting nine new fast chargers for electric vehicles
The initial court decision also rejected the buyer's case that two of the developers' officers were knowingly involved and her claim for $46,000 being the GST that would have applied to the unit's sale.
In the latest judgment, the court said those decisions had no errors.
The matter will be heard again in relation to costs from the legal proceedings.
The developer, a Hindmarsh Group subsidiary, had denied wrongdoing.
The class action against the developer was heard with another against Barton's Governor Place developed by Barton Nine and 13.9 Barton in relation to GST issues.
In August 2020, the parties in that matter, involving about 120 group members, settled for $2.57 million.
