Skip to main content

This blog contains a case study of a land tax claim.

A practitioner based in Melbourne was acting for a national company in the purchase of numerous commercial properties from the one vendor. The properties were in Queensland and the settlement was effected in late 2011.

As part of the settlement process the practitioner obtained information from the relevant authority about land tax payable. The information referred to two amounts relating to various properties owned by the vendor.

The first amount was for approximately $50,000 and was described as a garnishee notice. The second amount was for approximately $35,000 and described as an accompanying liability service. The certificate from the authority also referred to penalty interest being payable.

At settlement an adjustment was made for the amount of $50,000 (plus penalty interest). The practitioner incorrectly assumed the $50,000 amount was for all properties and included the $35,000 ‘accompanying liability service’ and all penalty interest. The $35,000 was actually a separate amount relating to arrears for the properties.

The error was discovered two years after settlement when the authority made a demand on the purchaser to pay the arrears. The purchaser sought payment from the vendor only to discover the vendor had been wound up.

This claim illustrates the traps of acting in a matter outside the practitioner’s jurisdiction. Investigating the option of using a local lawyer to check significant aspects of the file such as the adjustments is one way of avoiding this sort of claim.