Claims by Auckland real estate agent Anyos Gonczy that his purchase of three Pukekohe sites was in the bag were dismissed by the High Court; price at $2.4 million was agreed, but GST liability was never finalised.
Over a two week period in early January 2021, Mr Gonczy was negotiating with JSM Properties Ltd for purchase of adjoining sites in Seddon Street and Dublin Street, Pukekohe. Through his company Inspire Holdings Ltd, he offered ‘$2.4 million inclusive of GST.’ JSM countered with its offer to sell at ‘$2.4 million inclusive of GST (if any).’
The High Court was told JSM Properties is owned by a consortium of private investors. They were aware Inspire might be claiming a GST refund on any purchase. As protection against a potential loss of $313,000 from the purchase price, JSM Properties wanted the contract worded as including GST ‘(if any).’
Mr Gonczy subsequently sent back an amended version of the previously amended agreement for sale and purchase with the bracketed phrase ‘(if any)’ struck out and with that change initialled. The High Court was to later rule this amended document amounted at law to a new offer; terms offered by JSM in the previous interchange had now lapsed.
Evidence was given of a flurry of emails then resulting in a consensus that the bracketed phrase ‘(if any)’ could stay, with the addition of a GST warranty clause, terms of which were yet to be agreed. Mr Gonzcy promptly sent off a reprint of the JSM counter offer from days previously, duly signed and initialled. He claimed there was now a binding contract at $2.4 million, with the price inclusive of GST (if any).
There was never any agreed contract Associate judge Andrew ruled. Signing a reprint of the earlier JSM counter offer was not an acceptance of that counter offer; the counter offer was not capable of acceptance since it no longer existed, it had lapsed when Mr Gonzcy made a subsequent offer striking from the document the phrase ‘(if any).’ The flurry of emails did not create a contract either; agreement was conditional on negotiating a GST warranty clause and that had not been finalised. Contract negotiations made it clear there was no binding deal until everything was reduced to writing and signed off by both sides, Judge Andrew said.
Inspire Holdings Ltd v. JSM Properties Ltd – High Court (7.07.21)
21.115