Applicant v First Respondent

1 This is an appeal from the decision of Lansdowne AsJ of 14 September 2012 refusing leave to appeal from a decision of the Victorian Civil and Administrative Tribunal (the 'Tribunal') dated 23 February 2011.

2 The present appeal is by rehearing de novo of the application made to the Associate Judge. At the time her Honour refused leave to appeal, Rule 77.06(7) of the Supreme Court (General Civil Procedure) Rules 2005 provided as follows:

The appeal shall be by re-hearing de novo of the application to the Associate Judge but each party may, subject to any proper objections to admissibility -

(a) rely upon any affidavit used before the Associate Judge and upon any evidence given orally before the Associate Judge;

(b) by special leave of the Judge of the Court, rely upon an affidavit or oral evidence not used or given before the Associate Judge.

3 The appeal is therefore a complete rehearing. It falls to the Court to determine whether, under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (the 'VCAT Act'), the applicant ought to be granted leave to appeal the Tribunal's decision.

4 The principles for the grant of leave are well established.[1] The applicant must identify a question of law arising out of the Tribunal's decision that is relevant to the relief sought on the appeal and must satisfy the Court that the Tribunal's order is attended by sufficient doubt to justify the grant of leave.

5 In this case, given the nature of the questions raised, as well as the long delay that has occurred since the Tribunal handed down its decision in February 2011, the Court considered it just and convenient to hear argument in the application for leave to appeal and in the appeal from the Tribunal's order at the same time. In order to determine whether leave to appeal ought to be granted, it would be necessary, in any event, to canvass comprehensively the questions of law in the applicant's proposed notice of appeal. The questions are not simple ones, and the prospects of success of the grounds of appeal could not be readily ascertained.

6 For the reasons that follow, leave to appeal must be granted, and the appeal from the Tribunal's order deemed to have been instituted and heard instanter and allowed for the purpose of substituting orders that reflect these reasons.

7 The first respondent, Mr Booth, bought a property at Sorrento from the applicant, Cityrose, by contract of sale signed and exchanged on 20 May 2006 after the property had been passed in at auction earlier that day. The second respondent ('Kay & Burton') was the real estate agent appointed by Cityrose to sell the property.

8 The dispute before the Tribunal was whether Mr Booth was required to pay only the purchase price stipulated in the Particulars of Sale or whether he was liable to pay that amount and a further amount referrable to GST payable on the sale.

9 The purchase price was recorded in the Particulars of Sale as $2,250,000. That is what Mr Booth offered to pay for the property following the auction. The offer to pay $2,250,000 for the property was accepted by Mr Mario Salvo of Cityrose[2] and Mr Salvo and Mr Booth executed the contract of sale. The sale price of $2,250,000 was inserted in the Particulars of Sale, along with the amounts for the deposit and the residue. However, the contract of sale contained Special Condition 7, which was in the following terms:

7.1 For the purposes of this special condition:

(a) 'GST' means GST within the meaning of the GST Act;

(b) 'GST Act' means A New Tax System (Goods and Services) Act 1999;

(c) Expressions used in this special condition which are defined in the GST Act have the same meaning as given to them in the GST Act.

7.2 The consideration payable for any taxable supply made under this contract represents the value of the taxable supply for which payment is to be made;

Where a taxable supply is made under this contract for consideration which represents its value, then the party liable to pay for the taxable supply must also pay at the same time and in the same manner as the value is otherwise payable the amount of any GST payable in respect of the taxable supply.

10 Cityrose is the trustee of a family trust called the Regency Towers Trust, the family being the family of Mr Salvo. The Regency Towers Trust was registered for GST purposes, but Cityrose was not. However, there was no dispute that the sale of the property by Cityrose constituted a taxable supply upon which GST was payable. The issue was whether Special Condition 7 obliged Mr Booth to pay Cityrose not only the purchase price of $2,250,000 but also $225,000 in respect of Cityrose's GST liability arising from the sale.

11 Mr Booth was not informed until just before settlement that Cityrose required him to pay an additional amount for GST pursuant to Special Condition 7. He completed the contract of sale by paying at settlement, under protest, the additional $225,000. By agreement between the parties, the disputed sum of $225,000 was retained by the solicitors for Cityrose in a trust account pending determination of the Tribunal proceeding.

12 The Tribunal identified the questions before it as follows:

(a) Whether, upon the proper construction of the contract of sale, Mr Booth was liable to pay not only the purchase price stipulated in the Particulars of Sale, but also GST upon that purchase price;

(b) If the answer to the first question is yes, whether Mr Booth is entitled to any remedy against Cityrose or Kay & Burton by reason of Mr Booth not having been made aware that if he purchased the land upon the terms contained in the proposed contract of sale, he would become liable to pay the purchase price plus GST.

13 Before the Tribunal, Mr Booth contended that the contract of sale did not impose a liability to pay an amount in addition to the purchase price, but if it did, the contract of sale ought to be rectified to remove that liability. If rectification was not possible, he contended that the conduct of Cityrose and Kay & Burton, which induced him to enter into the contract of sale, was misleading or deceptive in contravention of the Fair Trading Act 1999 (Vic) and that he was entitled to other remedies under that Act, including variation of the contract of sale and compensation for the amount that he paid above the stipulated purchase price.

14 The Tribunal summarised Mr Booth's claim as follows:

[A] The main claim. The contract required him to pay no more than $2,250,000.00 so he is entitled to recover the extra $225,000.00 as money had and received. That is because Special Condition 7

(i) on its proper construction, had no application in the circumstances of the sale, or

(ii) on its proper construction, meant that the purchase price stipulated in the contract was GST-inclusive, or

(iii) was so uncertain as to be meaningless.

[B] Alternative claims are made on the footing that the Tribunal finds, contrary to Mr Booth's contentions, that on its proper construction Special Condition 7 meant that the purchase price was GST-exclusive and so totalled $2,475,000.00.

(I) Rectification. The contract ought to be rectified, to reflect an intention that the purchase price was $2,250,000.00 and no more.

(II) Excision. If rectification of the contract is not available, the Tribunal should, as a consequence of Cityrose's misleading or deceptive conduct in contravention of the Fair Trading Act 1999, exercise its powers under that Act to vary the contract by excising Special Condition 7 from it.

(III) The consequence of (I) or (II) would be the right to recover $225,000.00 either as money had and received or because the power under the Fair Trading Act to order a refund of that sum should be exercised.

(IV) Damages. Alternatively, if Special Condition 7 is not rectified or excised, Mr Booth has suffered loss and damage because of the misleading or deceptive conduct of Cityrose or of Kay & Burton or of both of them. By offering the land for sale in the way that they did, and by producing to him the contract of sale in the way that they did and in the terms that it took, they induced him to enter into the contract in the belief that it obliged him to pay $2,250,000.00 and no more. In truth it obliged him to pay $2,475,000.00. He thereby lost $225,000.00 plus additional stamp duty of $12,375.00. Either or both of the respondents are liable to pay those sums.[3]

(a) The preferable construction of Special Condition 7 was that it provided for the purchaser to pay GST in addition to the stipulated purchase price of $2,250,000. The main claim therefore failed.

(b) Rectification of the contract could and should be ordered as both Mr Booth and Cityrose intended that the purchase price would be $2,250,000 and no more. Special Condition 7 would be deleted from the contract of sale and Cityrose ordered to refund the payment of $225,000 and pay interest on that sum.[4]

16 The Tribunal also considered the claim that Cityrose and its agent, Kay & Burton, had engaged in misleading or deceptive conduct, although it was unnecessary to do so. It found that both Cityrose and Kay & Burton had engaged in misleading or deceptive conduct by which Mr Booth was induced to enter into the contract of sale in the belief that he was binding himself to pay $2,250,000 and no more; that Mr Booth suffered loss and damage by executing the contract of sale and binding himself to pay a higher amount, and by paying the higher amount; that, as a result, the contract of sale could be varied under s 158 of the Fair Trading Act to excise Special Condition 7; and that if it was not possible for the contract of sale to be varied in that way, an order for the payment of damages of $225,000 plus interest could be made. On the question of apportionment of the damages between Cityrose and Kay & Burton, the Tribunal held that Cityrose was entirely responsible for Mr Booth's loss and damage and dismissed the proceeding against Kay & Burton.

17 In reaching these conclusions, the Tribunal made the following findings of fact:

(a) Cityrose delegated to Jason van der Slot, Cityrose's manager, the task of engaging real estate agents to advertise and sell the land and of instructing Cityrose's solicitors, B2B Lawyers, to draft the contract of sale. Mr van der Slot signed an authority for Kay & Burton to sell the land at auction. Nothing in the form of the authority indicated that Cityrose intended the sale price to be GST-exclusive.

(b) However, Mr van der Slot instructed B2B Lawyers to include in the proposed contract of sale a provision for the purchaser to pay GST in addition to the purchase price.

(c) Once the land was advertised for sale, Mr Booth expressed to Kay & Burton his interest in making an offer to purchase it.

(d) However, Mr Booth wanted to ensure that if he purchased the land, he would have a right of way over the adjacent lot owned by Cityrose to enable him to walk to the beach. He engaged solicitors, Russell Kennedy, and instructed them to negotiate the inclusion in the draft contract of sale of a term that would secure his right of way.

(e) It was not until late on the afternoon of Friday 19 May 2006, the day before the auction, that B2B Lawyers sent copies of the proposed contract to Kay & Burton and to Russell Kennedy.

(f) Neither of the relevant persons at Kay & Burton - Ms Jensen and Mr Delany - saw the contract of sale until shortly before the auction began. Neither noticed Special Condition 7.

(g) Although Russell Kennedy advised Mr Booth that the draft contract included a special condition that Cityrose would register an easement over part of its adjoining land and although Russell Kennedy sent him by fax a copy of the proposed contract, Mr Booth did not pay attention to Special Condition 7.

(h) On 20 May 2006, Kay & Burton said nothing about GST during the auction or otherwise, and nobody else said anything about it.

(i) Neither Mr Booth nor the two persons involved in the sale for Kay & Burton[5] realised, at the time the contract of sale was concluded, that Special Condition 7 arguably made the contract GST-exclusive, requiring Mr Booth to pay the additional $225,000.

(j) On 10 August 2006, seven days before the proposed settlement date, B2B Lawyers sent to Russell Kennedy a copy of a 'Goods Statement for Residential Land' which the State Revenue Office required for stamp duty purposes. This document specified that the consideration expressed in the contract of sale did not include GST, that the GST-exclusive price was $2,250,000, that the GST payable was $225,000 and that the total amount payable was $2,475,000. That was the first indication that Mr Booth had that Cityrose was asserting that he was obliged to pay $2,475,000, not $2,250,000.

(k) Mr Booth proceeded to settle by paying the extra $225,000 under protest.

18 In its proposed notice of appeal, Cityrose raised no less than 18 grounds of appeal. Five of those grounds were abandoned. The remaining grounds are directed to three parts of the Tribunal's decision: its decision that the contract of sale could be rectified; its finding that Cityrose engaged in misleading or deceptive conduct and that Mr Booth suffered loss and damage as a consequence; and its decision not to apportion liability against Kay & Burton.

19 On the question of rectification, Cityrose contends that the Tribunal erred in law:

(a) in failing to identify the point in time at which a common intention was reached or the point in time at which a consensus was reached and for what period the common intention or consensus continued prior to the time of execution;

(b) in failing to consider the necessity, and Mr Booth's failure, to establish communication or disclosure of any common intention between the parties;

(c) in holding that the intention of Cityrose, when it gave instructions to its solicitors to prepare the contract of sale and include Special Condition 7, was not relevant to the claim for rectification;

(d) in failing to take account of the continuing intention of Cityrose that the price be exclusive of GST, from the time the instructions to draw the contract were given by Cityrose;

(e) in finding that there was any common intention which was contrary to the wording of the draft contract of sale; and

(f) in failing to consider the uncontradicted evidence given by Mr Booth that he did read Special Condition 7 before he executed the contract of sale when the Tribunal determined whether there was a common mistake.

20 In relation to misleading or deceptive conduct by Cityrose, Cityrose alleges that the Tribunal erred:

(a) in finding that Cityrose's conduct was misleading or deceptive because its disclosure of the GST liability was effected by providing a copy of the contract of sale to Mr Booth and his solicitors the day before the auction, which was 'not the most effective way' of disclosing such liability;

(b) in failing to consider the uncontradicted evidence given by Mr Booth that he read Special Condition 7 before he executed the contract of sale, and that his solicitors read the contract of sale prior to its execution;

(c) in failing to deal with or consider Mr Booth's uncontradicted evidence that he was relying upon his lawyers to check out the whole contract of sale and that he saw it as their responsibility to check out clauses like Special Condition 7;

(d) in failing to deal with or consider the submission by Cityrose that, in accordance with Butcher v Laclan Elder Realty Pty Ltd,[6] the GST clause was there to be read or to assign reasons for rejecting that submission;

(e) in failing to apply the date of transaction rule to the assessment of damages or to assign reasons why the date of transaction rule should not apply;

(f) in failing to apply the proper measure of damages under the Trade Practices Act 1974 (Cth), that is, to compare the position the purchaser is in with the position the purchaser would have been in but for the misleading or deceptive conduct.

21 Finally, in relation to apportionment, Cityrose contends that the Tribunal erred in failing to apportion liability against Kay & Burton in circumstances where the Tribunal had found that Kay & Burton engaged in misleading or deceptive conduct.

22 Because the appeal was heard at the same time as the application for leave to appeal, Mr Booth and Kay & Burton each filed a proposed notice of contention. Each of these notices challenges the Tribunal's decision that, on its proper construction, Special Condition 7 required Mr Booth to pay an amount for GST on top of the purchase price of $2,250,000.

23 Mr Booth contends that the Tribunal ought to have found Special Condition 7 to be so uncertain as to be meaningless and that it should be severed from the contract of sale. In the alternative, he contends that the Tribunal ought to have found that Special Condition 7 did not require him to pay any amount to Cityrose in addition to the purchase price of $2,250,000.

24 Kay & Burton's notice of contention contains five grounds arising from the Tribunal's construction of Special Condition 7, by which Kay & Burton contends, in essence, that the Tribunal erred in failing to construe the purchase price in the contract of sale as GST-inclusive. Kay & Burton further contends that the Tribunal erred in law in holding that the evidence before it supported a finding that Kay & Burton engaged in misleading or deceptive conduct. It contends, in particular, that the Tribunal erred:

(a) in finding that anything other than 'mere failure to disclose, or silence or refraining from action' had been alleged against Kay & Burton; and

(b) in failing to properly apply the proviso 'otherwise than inadvertently' in s 3 of the Fair Trading Act 1999 (Vic).

25 It is convenient to commence by considering whether the Tribunal erred in construing Special Condition 7 so as to require Mr Booth to meet any liability for GST in addition to the purchase price of $2,250,000. If the contract of sale does not oblige Mr Booth to pay an additional amount for GST, either because Special Condition 7 is void for uncertainty or because, properly construed, it makes the purchase price in the contract of sale GST-inclusive, then the basis for the Tribunal's order for rectification of the contract of sale and its conclusions concerning misleading or deceptive conduct falls away and the appeal on those questions ceases to have any utility.

26 Special Condition 7 must be construed in the context of and, so far as it is possible to do so, consistently with, the terms of the contract of sale as a whole. The conditions of the contract of sale are contained in (a) the Particulars of Sale; (b) the Schedule; (c) the General Conditions; and (d) the Special Conditions (if any). The Particulars of Sale are set out in tabular form on the first page of the contract describing, inter alia, the vendor, the purchaser, the land, the property address and the fixtures. The Particulars of Sale then provide:

On 20th August 2006 or within 14 days of approval of the plan of subdivision by the Registrar of Titles, whichever is the latter.

27 The purchase price is not expressed to be either inclusive or exclusive of GST. However, if the purchase price is exclusive of GST (as the Tribunal found), the 'residue' plainly does not include the payment required to meet Mr Booth's liability for both the purchase price and GST.

28 Special Condition 7 is set out in full above. Its operative provisions are in clause 7.2, which provides that, in a certain circumstance, the party liable to pay for the 'taxable supply' - the property - is also liable to pay the amount of any GST payable in respect of the supply, and it deems the 'consideration' payable for the taxable supply to represent its 'value'. Clause 7.1 defines terms used in the Special Condition by reference to the GST Act[7] and paragraph (c) provides that expressions used in Special Condition 7 which are defined in the GST Act are to have the meanings given to those expressions in the GST Act.

29 The GST Act defines the following expressions used in Special Condition 7: 'supply' (s 9-10), 'taxable supply' (s 9-5), 'consideration' (s 9-15), and 'value' (s 9-75).

30 Section 9-5 defines 'taxable supply' as follows:

9-5 Taxable supplies

You make a taxable supply if:

(a) you make the supply for consideration; and

(b) the supply is made in the course or furtherance of an enterprise that you carry on; and

(c) the supply is connected with Australia; and

(d) you are registered, or required to be registered.

However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.

31 Section 9-15(1) defines 'consideration' to include:

(a) any payment, or any act or forbearance, in connection with the supply of anything; and

(b) any payment, or any act or forbearance, in response to or for the inducement of a supply of anything.

32 The definition of 'value' is contained in s 9-75, which also contains within it a definition of 'price'. Section 9-75(1) provides:

(1) The value of a taxable supply is as follows:

where:

price is the sum of:

(a) so far as the consideration for the supply is consideration expressed as an amount of money - the amount (without any discount for the amount of GST (if any) payable on the supply); and

(b) so far as the consideration is not consideration expressed as an amount of money - the GST inclusive market value of that consideration.

Example: If you make a taxable supply by selling a car for $22,000 in the course of carrying on an enterprise.

The value of the supply is:

The GST on the supply is therefore $2,000 (i.e. 10% of $20,000).

33 Before the Tribunal, Cityrose argued that, on its proper construction, the contract of sale required Mr Booth to pay not only the purchase price set out in the Particulars of Sale, but also any GST payable on that amount. This was because:

(a) Special Condition 7 equates consideration under the contract of sale with value under the GST Act (this is what is meant when it is said that consideration payable 'represents' value). As a result, the $2,250,000 consideration under the contract is the 'value' within the meaning of the GST Act, not the 'price'.

(b) Special Condition 7 imposes an additional liability because it is something the person must 'also' pay.

(c) The additional liability is the amount of any GST payable, and is in addition to the $2,250,000 payable under the contract.

34 The Tribunal identified four objections to this construction, of which only the first two were significant: first, it did not sit well with the Particulars of Sale, which specified only the purchase price being payable by the purchaser, not the purchase price plus GST; secondly, it was inconsistent with paragraph 7.1(c) of Special Condition 7 because if consideration was equated with value, those terms had different meanings from those in the GST Act.

35 In the Tribunal's view, however, the second objection could be overcome if a notional adjustment was made to the structure of Condition 7 by adding the words, 'except that' to the end of paragraph 7.1(c) and moving the first paragraph of clause 7.2 into clause 7.1 to follow the words 'except that', so as to make what was the first paragraph in clause 7.2 an exception to the rule that expressions bear the meaning given to them in the GST Act.

36 The Tribunal's reformulated Special Condition 7 reads as follows:

7.1 For the purposes of this special condition:

(a) 'GST' means GST within the meaning of the GST Act;

(b) 'GST Act' means A New Tax System (Goods and Services) Act 1999;

(c) Expressions used in this special condition which are defined in the GST Act have the same meaning as given to them in the GST Act except that_:_

The consideration payable for any taxable supply made under this contract represents the value of the taxable supply for which payment is to be made.

7.2 Where a taxable supply is made under this contract for consideration which represents its value, then the party liable to pay for the taxable supply must also pay at the same time and in the same manner as the value is otherwise payable the amount of any GST payable in respect of the taxable supply.

37 The Tribunal observed that this reformulation did not require any sentence or words to be jettisoned and it made clauses 7.1 and 7.2 consistent with each other. Moreover, construed in this way Special Condition 7 had a practical point in that it added something to the contract of sale by imposing an additional obligation on the purchaser.

38 The Tribunal acknowledged that the objection that Special Condition 7 was inconsistent with the Particulars of Sale was not overcome. Nonetheless, it held that despite the drafting of Special Condition 7 being 'thoroughly unsatisfactory', it could be given a meaning and was not void for uncertainty. For the decisive reason that this construction gave a point to Special Condition 7, whereas competing constructions seemed to result in the Special Condition having no practical point at all, the Tribunal concluded that the preferable construction was that Special Condition 7 imposed a liability to make a payment for GST in addition to the purchase price specified in the Particulars of Sale.

39 Mr Booth's principal contention is that Special Condition 7 cannot be construed so as to be meaningful and should be severed from the contract of sale. He finds support for this submission in the judgment of Whelan J in Cityrose Trading Pty Ltd v Booth & Anor,[8] in which his Honour identified the difficulties associated with both the construction of the Special Condition resulting in a liability referable to GST being imposed on the purchaser in addition to the $2,250,000 purchase price[9] and with the construction resulting in no such additional liability being imposed on the purchaser.[10] His Honour suggested that there might be a third possibility: that the clause is so unclear as to be meaningless.[11]

40 According to Mr Booth, contrary to clause 7.1(c), the meanings of 'consideration' and 'value' cannot be the meanings attributed to those terms in the GST Act because under the GST Act, 'consideration' and 'value' in relation to a taxable supply cannot mean the same thing. Moreover, if 'consideration' bears the meaning given in the GST Act, it must include any additional amount payable by reason of the Special Condition itself. The definition of 'consideration' in the GST Act includes 'any act or forbearance' and therefore includes not only the sum of $2,250,000 but also the amount of $225,000 for GST, along with the promises and undertakings Mr Booth made in the contract of sale.[12] In equating consideration with value, Special Condition 7 is therefore internally inconsistent. Furthermore, the first paragraph of clause 7.2 means that the first words of at the beginning of the second paragraph have no work to do and are superfluous.

41 In the alternative, Mr Booth proposes to reformulate Special Condition 7 based on the principle that if a contract contains a word or phrase to which no sensible meaning can be given or which is mere surplusage, it may be rejected. Mr Booth therefore proposes to strike out the first paragraph of clause 7.2 so that Special Condition 7 reads as follows:

7.1 For the purposes of this special condition:

(a) 'GST' means GST within the meaning of the GST Act;

(b) 'GST Act' means A New Tax System (Goods and Services) Act 1999;

(c) Expressions used in this special condition which are defined in the GST Act have the same meaning as given to them in the GST Act.

7.2 The consideration payable for any taxable supply made under this contract represents the value of the taxable supply for which payment is to be made;

Where a taxable supply is made under this contract for consideration which represents its value, then the party liable to pay for the taxable supply must also pay at the same time and in the same manner as the value is otherwise payable the amount of any GST payable in respect of the taxable supply.

42 Special Condition 7 would then operate only where the purchaser paid an amount representing the value of the supply (as defined in the GST Act).

43 For its part, Kay & Burton advances a construction of Special Condition 7 that is consistent with the purchase price in the Particulars of Sale being GST-inclusive, but does not require any changes to be made to the form of Special Condition 7. This construction, so it is submitted, better supports the function of the purchase price clause in the Particulars of Sale and is consistent with the findings of the Tribunal as to the general GST-inclusive nature of contracts for the sale of residential property.

44 On Kay & Burton's construction, 'consideration' in Special Condition 7 is not equivalent to or coterminous with the term 'price', but refers merely to the concept of a payment being made in connection with the supply. On this basis, pursuant to paragraph 1 of clause 7.2, money to be paid by the purchaser (the 'consideration') under the contract 'represents' (that is to say, 'equals' not merely 'includes') 'value'. Paragraph 2 of clause 7.2 then requires the purchaser to pay any GST payable at the same time as the value. The obligation to pay value plus GST amounts to the purchaser paying the 'price'. On this analysis, the purchase price in the Particulars of Sale is the 'price' as defined in the GST Act and is GST-inclusive.

45 In support of this construction, Kay & Burton refers to what it describes as 'the general law with regard to price', which is that a price is GST-inclusive unless it is expressly stated otherwise. According to Kay & Burton, the usual rule is that GST will be reflected in the price payable by the purchaser, and the contract of sale must be construed having regard to this general context.[13]

46 As this is an appeal under s 148 of the VCAT Act, the Court must decide whether the Tribunal erred in law in holding that Special Condition 7 imposed on Mr Booth a liability to pay any GST in addition to the amount of the purchase price in the Particulars of Sale. If the Tribunal erred in adopting this construction, it may be because a different construction of Special Condition 7 is the correct one or because Special Condition 7 is incapable of being sensibly construed and is void for uncertainty.

47 Special Condition 7 provides that the terms 'consideration', 'value' and 'taxable supply' will have the meanings given to those terms in the GST Act. This has a number of implications.

48 The first is that whether the sale of the property is a taxable supply will depend on a number of factors that are not within the knowledge of the purchaser, because a GST liability will only arise if the four criteria in s 9-5 of the GST Act have been satisfied. The criteria include whether or not the supply is made in the course or furtherance of an enterprise carried on by the supplier and whether the supplier is registered or required to be registered for GST purposes. A stranger attending the auction of a residential property will not know these things without first making inquiries of the supplier/vendor. In this case, the evidence was that neither Mr Salvo nor Kay & Burton knew whether the sale of the property would attract a GST liability, so it is likely that any such inquiry would have been futile.

49 Secondly, the definitions of 'consideration', 'value' and 'price' are interconnected and none stands alone. Value is defined as ten elevenths of price, price being therefore equivalent to value plus ten percent. 'Price' is the amount payable for the supply without any discount for GST (that is, it is inclusive of GST (where GST applies)); value is the amount on which GST is calculated (that is, it is always exclusive of GST). Consideration is not defined by reference to either value or price, but is expressed to include 'a' payment (or an act or forbearance) in connection with the supply of anything. However, where consideration is expressed solely as an amount of money, the 'price' is that amount (without any discount for the amount of GST (if any) payable on the supply). In these circumstances, consideration will be a GST-inclusive amount and will be coterminous with price. Value will remain the base upon which any GST payable is calculated.

50 Having regard to these definitions, Special Condition 7 nonetheless provides that:

(a) The consideration payable for any taxable supply made under the contract (including the property) 'represents' the value of the supply; and

(c) The party liable to pay for the supply (the purchaser) must also pay - at the same time and in the same manner as the 'value' of the supply is otherwise payable - the amount of any GST payable in respect of the supply.

51 Special Condition 7 therefore equates consideration with value. It deems 'the consideration' payable for a supply to be equivalent to the 'value' of the supply rather than to its price, although it says nothing at all about price. This is so, even though the person purchasing the supply may not be in a position to ascertain whether GST is payable on the supply and may not know whether the payment is made in respect of the 'value' of the supply or in respect of its price. Moreover, as Whelan J observed in Cityrose Trading Pty Ltd v Booth & Anor,[14] the meanings attributed to 'consideration' and 'value' cannot be the meanings attributed to those terms in the GST Act, because if 'consideration' has the meaning it has in the GST Act, then any amount payable under Special Condition 7 would also be part of the consideration (as an amount payable in connection with, in response to, or for the inducement of the supply).[15]

52 It is plain that Special Condition 7 pays little attention to the scheme in the GST Act and the interrelationship between 'consideration', 'value' and 'price'. It purports to use terms defined by the GST Act, yet it does not, as a matter of logic, permit all of the relevant terms to have the meanings given by that Act. It is a matter for the reader to try to work out (or speculate) which terms might bear the meanings in the GST Act and which cannot.

53 There is a further difficulty in that, having regard to the opening words in the second paragraph of clause 7.2 commencing with the word 'Where' ('where' in this context meaning 'if'), Special Condition 7 apparently provides for imposition of a GST liability on the purchaser only in a particular circumstance, yet it deems the circumstance to exist in the preceding paragraph. As a result, as the Tribunal observed, the opening words in the second paragraph are superfluous.

54 Construing Special Condition 7 in the form in which it appears in the contract of sale therefore requires the resolution of issues of internal inconsistency and superfluity. That is why both the Tribunal and Mr Booth found it necessary to add to or subtract from the words in the Special Condition.

55 Putting aside for one moment whether it is permissible to re-write a contractual term in the manner proposed by the Tribunal and Mr Booth, there are problems with both reformulations.

56 On the Tribunal's construction, the proposition that 'the consideration payable' for the property represents its 'value' is an exception to the rule that expressions have the same meaning as in the GST Act. As a result, one or both of 'consideration' and 'value' do not have the meaning given by the GST Act. If Special Condition 7 makes the purchase price GST-exclusive and imposes an additional liability on the purchaser to pay GST, then 'value' must be GST-exclusive, consistently with the meaning of that term in the GST Act. However, 'consideration' must have a different meaning, so as to exclude any payment made in accordance with Special Condition 7 itself. This means that 'consideration' becomes something less than the payment made for the taxable supply and something different from its price.

57 This does not resolve the question of whether the purchase price in the Particulars of Sale includes an amount for GST, but it suggests that it might do so, contrary to the aim of the reformulation, which is to make clear that Special Condition 7 imposes an additional liability for GST. The reformulation is therefore unhelpful.

58 Mr Booth's reformulation of Special Condition 7 is also unhelpful, because it removes the only part of the Special Condition (the first part of clause 7.2) that attempts to anchor meaning by deeming something to be something else. If 'value' has the same meaning as in the GST Act, as it must, the Special Condition will apply only where the consideration payment is ten elevenths of the price, that is, where it is GST-exclusive. Again, whether the purchase price in the Particulars of Sale is GST-inclusive or GST-exclusive remains unresolved.

59 Both reformulations are unsatisfactory. Furthermore, I consider that there is no warrant to insert the words 'except that', which change the meaning of Special Condition 7 to exclude something that is otherwise expressly included by clause 7.1(c). The removal of half of clause 7.2, as proposed by Mr Booth, should not be countenanced as it involves, at least potentially, a major change the operative part of the Special Condition.

60 In this respect, the construction advanced by Kay & Burton, which does no express violence to the text of the Special Condition, is to be preferred.

61 The Kay & Burton construction, based on 'consideration' being different from price in the sense that it is merely a payment made in connection with supply, does not take into account the relationship in the GST Act between consideration and price where consideration is expressed solely as an amount of money. Moreover, like the construction adopted by the Tribunal, it suffers from the fact that, insofar as they retain both the first paragraph of clause 7.2 and the opening words in the second paragraph of clause 7.2, the latter are superfluous. Yet they are apparently important words, for they purport to describe the circumstances in which a liability is imposed.

62 There are problems with each of the alternative constructions. In the final analysis, none of them indicates by reference to the words used in Special Condition 7 whether the purchase price of $2,250,000 is intended to be GST-inclusive or GST-exclusive.

63 The Tribunal found Cityrose's construction to be preferable only to the extent that it was the least unsatisfactory of the competing constructions and stated that, ultimately, the 'decisive reason' for preferring the construction that made the purchase price GST-exclusive was that it gave 'a point to the condition whereas the competing constructions seem to result in the condition having no practical point at all'.[16]

64 I disagree with the 'decisive reason' given by the Tribunal for preferring the construction advanced by Cityrose. While the commercial aim or objective of Special Condition 7 may well have been to allocate responsibility for any GST liability attaching to the supply or supplies made pursuant to the contract of sale, this says nothing about whether the purchase price in the Particulars of Sale was intended to be GST-inclusive or GST-exclusive. Even if it is accepted that the purchase price would conventionally be viewed as GST-inclusive in the absence of a clear indication to the contrary, Special Condition 7 does not indicate whether the purchase price of $2,250,000 includes a component for GST. Furthermore, even if Special Condition 7 added nothing to the purchase price as specified in the Particulars of Sale, a clause headed 'Goods and Services Tax' might have been included because it is commercially sensible to have a GST clause to avoid doubt and dispute.

65 In my opinion, therefore, the commercial or 'practical' purpose identified by the Tribunal does not assist in giving meaning to the words in Special Condition 7. The answer to the question, 'What would reasonable persons in the position of the parties have understood the words in Special Condition 7 to mean?'[17] is that the persons in question would be uncertain. The words and their context provide no resolution to the question whether it was the objective intention of the parties to impose a liability on the purchaser in addition to the purchase price.

66 In The Council of the Upper Hunter County District v Australian Chilling and Freezing Co. Limited,[18] Barwick CJ made it clear that the fact that a contract admits of more than one possible meaning or which when construed can produce in its application more than one result will not be void for uncertainty:

As long as it is capable of meaning, it will ultimately bear that meaning which the courts (sic) ... decides is its proper construction ... The question becomes one of construction, of ascertaining the intention of the parties, and of applying it.[19]

67 This is the task conferred on the Court, so long as the language employed by the parties is not 'so obscure and so incapable of any definite or precise meaning that the Court is unable to attribute to the parties any particular contractual intention'.[20] In this respect, Barwick CJ distinguished between uncertainty of meaning and absence of meaning or intention.

68 In my view, the language used in Special Condition 7 is so obscure and so incapable of any definite or precise meaning that the Court is unable to attribute to the parties any particular contractual intention. Put another way, the competing constructions are equally 'open' (or not) and the Court is unable by legitimate means to divine what the parties should be taken to have intended as to whether Special Condition 7 rendered the purchase price GST-inclusive or GST-exclusive.

69 I have reached the conclusion that Special Condition 7 is void for uncertainty. In so concluding, I have given careful attention to the principle that when faced with issues of uncertainty and incompleteness, the Court should strive to uphold the validity of bargains,[21] and that the importance of upholding bargains is reinforced where the parties have, as here, acted on the agreement.[22] The question is one of construction and the language used will be interpreted broadly and fairly,[23] and not narrowly or pedantically.[24] An agreement will be enforced if it is not utterly impossible to place a reasonable meaning on the language used and to discern the parties' intention.[25]

70 In this case, although the parties concluded a bargain for the sale of the property for a price, they did not conclude a bargain for the payment of GST. In my view, it is impossible to place a reasonable meaning on the language used in Special Condition 7 and to discern the parties' intention with respect to the payment of GST.

71 As Special Condition 7 is meaningless, it should be severed if it is possible to do so.

72 According to Mr Booth, Special Condition 7 is severable, because even if a term forms a material part of the consideration under the contract, it may be severed if it forms a subordinate part of that consideration. Although the requirement to reimburse any GST liability in specified circumstances would form part of the consideration, it would only be a subordinate part of the consideration.

73 In Brew v Whitlock (No 2),[26] the Full Court described the test for severability to be whether the parties intended the operation of the contract apart from the impugned part to be conditional on the efficacy of that part or whether the contract was to take effect notwithstanding the failure of that part.[27] The Full Court said:

That intention is to be ascertained from the construction of the contract as a whole. The process of construction will have regard to such considerations as the independence in form of the impugned part, any interdependence of that part in form or operation with the rest, the effect that severance would have on the operation or meaning of what is left, the nature of the subject-matter dealt with in the part and its relative importance in the setting of the whole bargain, whether the impugned part is one of several promises supported by different considerations or by a common consideration, or whether it is part of a single consideration supporting a promise or promises or whether it is one of several considerations, and, if so, whether it is a material or important part of the total consideration or merely subordinate.[28]

74 A requirement to satisfy any GST liability incurred by the vendor would form part of the consideration moving from the purchaser for the transfer of the property. However, the proposition that Special Condition 7 was so important an ingredient in the agreement as a whole, in that it constituted an inseparable part of the consideration moving to the vendor, that it's invalidity would vitiate the entire contract of sale is unsustainable. That would depend on Special Condition 7 having the meaning contended for by Cityrose, that is, that it imposes a liability on the purchaser over and above the purchase price specified in the Particulars of Sale. If the Special Condition makes no provision for an additional payment because it is devoid of meaning, then what might be described as the ordinary rule regarding price will apply, which is that the purchase price is to be taken to be inclusive of any GST that is payable.

75 In my view, therefore, the contract of sale is not conditional on the efficacy of Special Condition 7 and can operate perfectly well without it. Indeed, the severance of Special Condition 7 would produce a contract for the sale of residential property that was in the conventional form of contracts of that kind. The price in the Particulars of Sale would be understood to be GST-inclusive (if any GST were payable).

76 If I am wrong about Special Condition 7 being void for uncertainty and severable, the construction advanced by Kay & Burton must be adopted, in that it does the least violence to the form and content of Special Condition 7, and it gives it the most cogent meaning. Importantly, it is consistent with the specification of the purchase price and the residue in the Particulars of Sale, and reflects what the Tribunal found to be the common understanding that price is GST-inclusive unless stated otherwise. This is important in the context of an auction of residential property where potential purchasers had no way of knowing from the contract of sale itself whether there would be any GST liability on the sale.

77 The Tribunal made an order rectifying the contract of sale to delete Special Condition 7 so that the purchase price is $2,250,000 and no more, requiring Cityrose to pay Mr Booth $225,000 plus interest and dismissing the proceeding against Kay & Burton and Cityrose's counterclaim. This order must be set aside.

78 In lieu thereof, the Court will declare that Special Condition 7 in the contract of sale is void for uncertainty and that the contract of sale did not require Mr Booth to pay an additional amount for GST because the parties concluded no bargain in respect of GST. The Court will hear from the parties as to the form of further orders the Court should make.

79 Cityrose's grounds of appeal attack only those parts of the Tribunal's decision in which the Tribunal held that the contract of sale should be rectified to delete Special Condition 7 and which dealt with the allegations of misleading or deceptive conduct against Cityrose. Mr Booth's claims for rectification of the contract of sale and for remedies for misleading or deceptive conduct were matters for adjudication by the Tribunal because it had determined that Special Condition 7 required Mr Booth to pay the additional amount of $225,000 for GST. However, the construction preferred by the Tribunal cannot stand for the reasons outlined. Cityrose's grounds of appeal, even if made out, cannot now affect the outcome of this appeal.

80 Nonetheless, in case I am wrong about Special Condition 7 being void for uncertainty and severable, I propose to consider - very briefly - Cityrose's grounds of appeal in respect of rectification and misleading or deceptive conduct.

81 Were it necessary to decide, I would have held that the Tribunal erred in ordering that the contract of sale be rectified.

82 The Tribunal found that the respective intentions of Mr Booth and Mr Salvo were that the purchase price payable under the contract should be $2,250,000 and that each of them signed the contract in the belief that the contract reflected that intention. Neither intended that the purchaser should have to pay $2,475,000. As the effect of the contract was to require the purchaser to pay the higher amount, the execution of a contract containing Special Condition 7 was a common mistake.[29]

83 I have some difficulty with the way in which the Tribunal has framed the issue of common intention. In my view, the proper question was whether there was a common intention that no additional liability for GST be imposed on the purchaser. This is because Special Condition 7 (as construed by the Tribunal) is not a price clause; rather, it is a clause imposing on the purchaser an impost in addition to the purchase price. It is clear on the evidence that neither Mr Booth nor Mr Salvo turned his attention to any possible GST liability, let alone whether the purchase price was to be read as inclusive or exclusive of GST. Neither of them gave any thought to GST.

84 However, no specific challenge was made to the way in which the Tribunal framed the question. Rather, Cityrose challenged the Tribunal's decision to rectify the contract of sale on the grounds of its alleged failure to take into account a number of the circumstances surrounding the execution of the contract, including the uncontradicted evidence by Mr Booth that he read Special Condition 7 before he executed the contract of sale, and by then finding there was a common intention which was contrary to the words in the draft contract of sale. In my view, most of these matters go to the weight that the Tribunal gave to the evidence before it. The Tribunal went to considerable lengths to analyse the evidence and to make findings as to the parties' conduct in order to discern the respective intentions of Mr Booth and Cityrose and when those intentions were formed. This included findings as to the roles of the solicitors and Mr Van der Slot in preparing the contract of sale, along with what occurred at the auction and after the auction, culminating in the execution of the contract of sale by both Mr Booth and Mr Salvo. Moreover, the Tribunal did not find that Mr Booth had not read the GST clause. The Tribunal's reasons record that the contract of sale was sent to him by his solicitors at 5.25pm on the day before the auction, that Mr Booth 'looked through it' to make sure that the condition about the easement was there, but that he did not pay attention to Special Condition 7.[30]

85 However, I consider that the ground of appeal based on the Tribunal's failure to consider the necessity to establish communication or disclosure of the common intention between the parties to have substance. In Meagher, Gummow and Lehane, Equity Doctrines and Remedies,[31] the learned authors express the view that 'no outward expression of accord is necessary, but whatever intentions the parties had cannot remain undisclosed'. In Maralinga Pty Ltd v Major Enterprises Pty Ltd,[32] Mason J (as he then was) said that it was not enough to set about finding what one or even both of the parties to the contract intended. Rather, it was necessary to find out what intention was communicated by one side to the other and with what common intention and common agreement they made their bargain.[33] Likewise, in Australasian Performing Right Association Ltd v Austarama Television Pty Ltd,[34] Street J said of rectification that:

The true principle involves finding an identical corresponding contractual intention on each side, manifested by some act or conduct from which one can see that the contractual intention of each party met and satisfied that of the other. On such facts there can be seen to exist objectively a consensual relationship between the parties.

86 The question of what is involved in the 'disclosure' of a common intention is a difficult one. In Ryledar Pty Ltd v Euphoric Pty Ltd,[35] Campbell JA in the New South Wales Court of Appeal carried out a detailed review of the authorities on whether an outward expression of accord was required (his Honour concluded that it was not) and what might be encompassed by disclosure of intentions. His Honour said:

Even though there is a requirement for the intention to be disclosed before it can count as common intention, that disclosure need not be by words that say in substance 'this is my intention'. The need for disclosure fills the role of being a limitation on the types of subjective intention that can be enforced through the remedy of rectification, or a limitation on the circumstances in which a subjective intention must exist before it can be enforced through the remedy of rectification.[36]

87 Cityrose contends that in order for rectification in the terms sought by Mr Booth to be made, the Tribunal was required to be satisfied by positive, convincing proof that the subjective intentions of both Mr Booth and Cityrose were that the purchase price listed in the contract was inclusive of any GST liability and that such intention was disclosed by the parties' words or conduct at the relevant time. However, the only communication by Mr Booth was his offer of $2,250,000 on the terms and conditions contained in the signed written contract of sale, which included the GST clause. This offer was communicated to Mr Salvo by having the contract handed to him. Mr Salvo in turn signed the contract and communicated back to Mr Booth via the written contract which, of course, contained the GST clause. According to Cityrose, there was no common consensus prior to the point of execution, and no disclosure or communication other than an offer from Mr Booth which incorporated the GST clause.

88 For his part, Mr Booth relied on the decision in Commerce Consolidated Pty Ltd v Johnstone,[37] in which the Full Court of this Court rectified a contract for the sale of land in circumstances where a vendor and purchaser had failed to communicate about the date upon which interest would begin to run in respect of the outstanding balance of the sale price. The contract was rectified so that interest would run from the date the purchaser took possession of the property on the basis that both vendor and purchaser took for granted that the purchaser was to pay interest from the time he obtained possession of the property.

89 The Tribunal was satisfied that each of Mr Booth and Mr Salvo held the same intention in relation to the amount payable by Mr Booth under the contract at the time that they executed the contract of sale. However, it did not consider the issue of the communication or disclosure of the common intention that it had identified. Insofar as the Tribunal had regard to Commerce Consolidated Pty Ltd v Johnstone,[38] it was in relation to a submission that rectification could be ordered for unilateral mistake, a submission which it rejected. In my view, it was necessary for the Tribunal, having found that Mr Booth and Mr Salvo had the same intention, to consider the question of communication or disclosure of that common intention. It did not do so.

90 Were it necessary to do so, therefore, I would hold that the Tribunal erred in law in failing to consider whether there was communication or disclosure of common intention between the parties.

91 However, I see no error in the Tribunal's conclusion that Cityrose engaged in misleading or deceptive conduct, and that Mr Booth suffered loss and damage as a result, thus enlivening the remedies in s 158(2) of the Fair Trading Act. The Tribunal identified conduct that induced or was likely to have induced Mr Booth to enter into the contract of sale and was misleading or deceptive. The misleading or deceptive conduct of Cityrose vis-à-vis Mr Booth was described as follows:

(g) its solicitors sent to his solicitors a draft of the contract so late that the opportunity for his solicitors to advise him properly as to it, and the opportunity for him to read it and understand it or seek clarification of it, were minimised;

(h) the auction contract sent to his solicitors and the auction contract presented to him for signature on 20 May 2006, contained particulars of sale which did not specify that the purchase price was GST-exclusive, and contained an obscure Special Condition 7.[39]

92 The Tribunal concluded that it was quite unrealistic to say that Mr Booth and his solicitors, between 4.30pm on Friday 19 May 2006 and the auction time of 3.00pm on Saturday 20 May 2006, could have and should have understood Special Condition 7 to mean that the purchaser would have to pay the purchase price plus GST, even though the Particulars of Sale did not mention GST.[40] It referred to the commercial context for the sale of residential property, based on evidence before it, and observed that because the sale was a sale by auction, and the draft contract prepared for the purpose was an auction contract, a prospective purchaser at auction would not have the opportunity to read the draft contract until the day of the auction unless he or she asked for an earlier opportunity. Furthermore, the Tribunal found that because it was a sale of residential land, it would be unusual for the sale to attract a GST liability. Based on the evidence of the estate agents, the Tribunal found that a vendor of residential property for sale by auction, and its selling agent, ought to appreciate that ordinarily there would be no reason for a prospective purchaser to think that a GST liability would arise, let alone a GST liability that the purchaser would have to meet in addition to the purchase price, unless the purchaser was specifically told so. In these circumstances, the vendor ought to appreciate that telling the purchaser that the sale attracted a GST liability payable by the purchaser merely by putting a special condition in the contract, might not be the most effective way of doing it.[41]

93 Cityrose contends that the Tribunal erred in failing to take into account or consider a number of important matters, including the fact that a copy of the contract was provided to Mr Booth and his solicitors the day before the auction, that Mr Booth read Special Condition 7 as did his solicitors, that Mr Booth stated that he was relying on his solicitors to check out the whole contract of sale and saw it as their responsibility to check out clauses like Special Condition 7, that the GST clause was 'there to be read' and Mr Booth's evidence was that he read the contract.

94 In my view, this complaint goes to the weight to be given to the evidence in question. The Tribunal did take into account the fact that Mr Booth and his solicitors had been provided with the contract of sale the day before the auction. Its reasoning took into account that either one or both of Mr Booth and his solicitors read the contract of sale and, indeed, the GST clause.[42] The problem was that the clause was almost impossible to understand and was contained in a contract containing particulars of sale that did not express the price to be GST-exclusive in circumstances where it would be unusual, as a matter of ordinary commercial practice, for prices to be GST-exclusive. The Tribunal held that, in these circumstances, it was insufficient (that is, misleading or deceptive) simply to provide a copy of the contract to the purchaser and/or his solicitors.

96 Cityrose further contends that the Tribunal erred in finding that Mr Booth had established loss and damage in circumstances where Mr Booth had not established that there was a difference between the price paid for the land ($2,475,000, being the purchase price plus GST) and the true value of land, in accordance with the rule in Potts v Miller.[43] According to Cityrose, Mr Booth based his claim on the difference between what was paid and what would have been paid if the representation was true, an approach specifically rejected by the High Court in Henville v Walker.[44]

97 The Tribunal considered the availability of the remedies under s 158 of the Fair Trading Act only in case it was wrong about rectification. Its consideration of whether Mr Booth had suffered loss and damage for the purpose of enlivening the s 158 remedies was fairly cursory. The Tribunal explained why it did not apply the date transaction rule by reference to the decisions in Demagogue v Ramensky[45] and Murphy v Overton Investments Pty Ltd[46]. In Murphy v Overton Investments Pty Ltd,[47] the High Court held that references to 'loss and damage' in the Trade Practices Act 1974 (Cth) could be given no narrow meaning. The High Court observed that what kinds of detriment constituted loss or damage, when a detriment was to be identified as occurring or likely to occur and what remedies were to be awarded might all raise difficult questions. This was especially so as the remedies could be awarded so as to compensate, prevent or reduce loss or damage that had been or was likely to be suffered as a result of contravening conduct.[48]

98 In my view, Mr Booth's claim could be characterised otherwise than as arising from having paid too much for the property. Mr Booth did not complain that the amount of $2,475,000 was not commensurate with the value of the land or that the purchase price was too high. His claim was that Cityrose's misleading or deceptive conduct induced him to enter into a contract in the belief that the contract obliged him to pay $2,250,000 and no more, when in truth it obliged him to pay an additional $225,000 as a result of an unheralded impost. The impost itself was contingent on Cityrose incurring a GST liability.

99 As a consequence, I am not persuaded that the Tribunal erred in finding that Mr Booth suffered loss and damage as a consequence of Cityrose's conduct or that the Tribunal erred in concluding that the contract could be varied to excise Special Condition 7 or in ordering the payment of compensation pursuant to its powers under s 158 of the Fair Trading Act.

100 Kay & Burton submitted that the Tribunal erred in holding that it engaged in misleading or deceptive conduct in advertising the land without reference to any GST-exclusive price, in omitting to tell Mr Booth (before or after auction) that the sale price would be GST-exclusive or in conducting the auction without informing prospective bidders that any price was GST-exclusive, in circumstances where it also found that Kay & Burton's conduct was entirely the consequence of Cityrose's conduct. The Tribunal found that the fact that Cityrose had instructed its solicitors to prepare a contract of sale that specified a GST-exclusive price and that prospective purchasers ought to be told that entry into the contract would oblige them to pay the purchase price plus GST remained a well kept secret from Kay & Burton.[49]

101 In these circumstances, I am not persuaded that the Tribunal erred in failing to apportion liability against Kay & Burton.

102 However, I do not propose to consider whether the Tribunal erred in finding that Kay & Burton engaged in misleading or deceptive conduct by silence in circumstances where it did not know of the matters to which it is said it should have alerted prospective purchasers. There is conflicting authority on whether misleading or deceptive conduct by silence must be intentional in order to be actionable under the Trade Practices Act 1974 (Cth). Kay & Burton submitted that the Reasons misapplied the legal principles governing alleged misleading and deceptive conduct by silence. In Miller's Australian Competition and Consumer Law Annotated,[50] the learned author states as follows:

Where an action is brought based on failure to provide information, CCA s 4(2)(a) may be relevant because it provides that 'engaging in conduct' includes refraining (other than inadvertently) from doing an act. In such cases the refraining must be deliberately engaged in because CCA s 4(2)(a) makes it clear that inadvertence does not invoke the provision: Rhone-Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd (1986) 12 FCR 477, 68 ALR 477; Demagogue Pty Ltd v Ramensky [1992] FCA 557; (1992) 39 FCR 31, 110 ALR 608; Costa Vraca Pty Ltd v Berrigan Weed & Pest Control Pty Ltd [1998] FCA 693.[51]

103 However, in CCP Australian Airships Ltd v Primus Telecommunications Pty Ltd,[52] Nettle JA said:

... the misleading and deceptive quality of remaining silent inheres in the non-disclosure of information; not in any refusal to provide it. Consequently, it does not follow from the fact that a failure to act must be intentional in order to be actionable, that silence must be intentional in order to be actionable. It is plain in principle and authority that it is not necessary that silence be intentional in order that it may constitute misleading and deceptive conduct for the purposes of s 52.[53]

104 I would be bound by this statement of the law by the Court of Appeal.

105 In any event, having found that the contract of sale did not oblige a purchaser to pay an amount for GST in addition to the purchase price specified in the Particulars of Sale, neither Cityrose nor Kay & Burton could be said to have engaged in misleading or deceptive conduct for the reasons alleged.

106 In the result, Cityrose was successful on the grounds relating only to rectification and Mr Booth succeeded on the ground in his notice of contention that Special Condition 7 is void for uncertainty.

107 In these circumstances, the orders of Lansdowne J must be set aside and the appeal from the decision and orders of Lansdowne J allowed. Leave to appeal from the order of the Tribunal will be granted, the appeal deemed to have been instituted and heard and determined instanter and allowed.

108 The order of the Tribunal will be set aside, and orders made in accordance with these reasons.

109 Subject to further argument, I propose to make declarations in the following form:

1. Special Condition 7 in the contract of sale is void for uncertainty and is severed from the contract of sale.
2. The parties to the contract of sale did not conclude any bargain for the payment of GST and the purchase price of $2,250,000 in the Particulars of Sale is therefore to be understood to be inclusive of any GST payable on the sale.

110 I will hear from the parties as to consequential orders, interest and costs.

[1] Department of Premier and Cabinet v Hulls [1999] VSCA 117; [1999] 3 VR 331.

[2] Although Mr Salvo was not a director of Cityrose, he was its decision-maker.

[3] Booth v Cityrose Trading Pty Ltd (ACN 077 934 671) and anor (Civil Claims) [2011] VCAT 278 [12] ('Reasons').

[5] The two relevant persons at Kay & Burton were the sales person, Ms Elizabeth Jensen, and the auctioneer, Mr Gerald Delany.

[6] [2004] HCA 60; (2004) 218 CLR 592, 608.

[7] A New Tax System (Goods and Services Tax) Act 1999 (Cth).

[8] [2008] VSC 495.

[12] For example, Special Condition 11, in which Mr Booth undertook to assume the obligations of Cityrose in respect of the property and to indemnify Mr Booth from all claims in connection with those obligations.

[13] In Australian Competition and Consumer Commission v Signature Security Group Pty Ltd, [2003] FCA 3 Stone J described the policy underlying the GST Act to be that, although the supplier of goods and services was responsible for the payment of the GST to the revenue authorities, the consumer was intended to carry the financial burden, which would be reflected in the price paid by the consumer. Implementation of the policy that the consumer should bear the ultimate burden relies on the commercial reality that the costs of the GST will, sooner or later, be reflected in the price payable by the consumer.

[14] [2008] VSC 495.

[17] A contract should be interpreted as having the meaning that would be given to it by a reasonable reader in the position of the parties at the time the contract was made. In Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 the High Court said (at [40]):

The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.

[18] [1968] HCA 8; (1968) 118 CLR 429.

[20] Ibid, 437 citing Lord Wright in Scammell and Nephew Ltd v Ouston [1941] AC 251.

[21] Mason J in Meehan v Jones [1982] HCA 52; (1982) 149 CLR 571, 589; Ipex Software Services Pty Ltd v Hosking [2000] VSCA 239, [56].

[22] York Air Conditioning v Commonwealth [1949] HCA 23; (1949) 80 CLR 11.

[23] Cohen v Mason [1961] Qd R 518, 527, 528-9.

[24] Upper Hunter County District Council v Australian Chilling & Freezing Co [1968] HCA 8; (1968) 118 CLR 429, 437 (Barwick CJ).

[25] Brown v Gould [1972] Ch 53, 57; Hammond v Vam Ltd [1972] 2 NSWLR 16, 18.

[26] [1967] VicRp 102; [1967] VR 803.

[31] Meagher, Gummow and Lehane, Equity Doctrines and Remedies, 4th ed (2002) Australia, Butterworths Lexis Nexis, 888.

[32] [1973] HCA 23; (1973) 128 CLR 336, 349-350.

[34] [1972] 2 NSWLR 467, 473.

[35] [2007] NSWCA 65; [2007] 69 NSWLR 603.

[37] [1976] VicRp 78; [1976] VR 724.

[38] [1976] VicRp 78; [1976] VR 724.

[42] I refer to Associate Justice Lansdowne's careful and helpful analysis of the Tribunal's treatment of the evidence before it as to whether Mr Booth read the contract of sale (at [36] - [40]) and as to the advice that Mr Booth sought from his solicitors (at [68] - [73]).

[43] [1940] HCA 43; (1940) 64 CLR 282.

[44] [2001] HCA 52; (2001) 206 CLR 459.

[45] [1992] FCA 557; (1992) 39 FCR 31.

[46] [2004] HCA 3; (2004) 216 CLR 388.

[50] R V Miller, Miller's Australian Competition and Consumer Law Annotated, 35th ed., Lawbook Co, 2013.

[52] [2004] VSCA 232.