Canberra apartment buyers in a large double class action have sued some of the city's biggest developers alleging they incorrectly paid GST on their purchases.
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The suit, lodged in the Federal Court, alleges that the buyers agreed to pay GST as a portion of the purchase price but the developers were not liable to pay it and so kept the resulting windfall.
The developers deny the allegations, and the two cases are listed to be heard in Sydney from Wednesday.
The cases concern two separate developments; Barton's Governor Place, developed by Barton Nine and 13.1 Barton (entities of the Morris Property Group and the Doma Group), and Belconnen's Altitude Apartments, developed by Belconnen Lakeview (a subsidiary of Hindmarsh Group).
According to the respective developments' websites, Governor Place has 171 apartments and Altitude has 348. Litigation funder IMF Bentham is behind the class action, and firm Corrs Chambers Westgarth is acting for the buyers.
Assuming an average contract price of about $450,000, each owner could expect a refund of $40,000 if successful. The developers could be ordered to repay millions of dollars.
The case will centre around the interpretation of Australian tax law and the contracts for sale. The buyers say the developers are liable to repay the amount equivalent to the GST, and are also liable for damages for breach of contract and contravention of the Australian consumer law.
The developers deny the allegations. They say the purchase price was the amount in the contract, irrespective of GST.
The developers also deny the allegations of breach of contract and of the consumer law.
