Australia: GST clause held to be void for uncertainty

A recent decision of the Victorian Supreme Court, in the case of Cityrose Trading Pty Ltd v Booth, highlights the need for suppliers to ensure that all of their transaction documents (including contracts, agreements and deeds) include adequately drafted pricing provisions and GST clauses.

The case related to the sale of land in Victoria for $2.25m under a contract which included a GST clause. A dispute arose as to whether the GST clause obliged the purchaser (Booth) to pay an additional $225,000 to the vendor (Cityrose) on account of GST.

Justice Emerton held that the GST clause was void for uncertainty. Subject to any further arguments from the parties, Her Honour proposes to declare that the clause is severed from the contract…

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