Author Archives: chrissievers

Commissioner publishes GST Determination on second hand goods

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Yesterday the Commissioner published GSTD 2013/2 ‘Goods and services tax: when are second-hand goods acquired for the purpose of sale in the ordinary course of business under Division 66 of the A New Tax System (Goods and Services Tax) Act 1999’.

Section 66 of the GST Act entitles taxpayers to an input tax credit for the acquisition of second hand goods in certain circumstances, notwithstanding that the second hand goods are purchased from an entity which is not registered for GST. One of the requirements is that the second hand goods are acquired “for the purposes of sale or exchange (but not for manufacture) in the ordinary course of business)”.

The Determination takes the following view:

  • the requirement will be satisfied where the second hand goods are acquired by an entity which is in the business of buying and selling second hand goods, and the goods are acquired for the purpose of being sold in the ordinary course of that business;
  • the requirement will not be satisfied where the goods are acquired only in order to be leased, or where there is simply an intention that the goods will ultimately be sold after they are no longer required
  • the requirement will be satisfied where an entity carries on a business involving the leasing and selling of second hand goods and:
    • the goods are acquired in the ordinary course of the business;
    • the contractual arrangements under which the second hand goods were acquired and leased contemplate that the entity will lease the goods back to the vendor for a defined term and then sell the goods at the conclusion of the lease term;
    • the contractual arrangements provide that the proceeds from selling the second hand goods will be compared with the residual value agreed upon commencement of the arrangements, in order to determine the extent of any indemnity payable by the lessee, or, entitlement of the lessee to participate in profits from the sale of the goods; and
    • the way the entity conducts its business objectively supports the conclusion objectively supports the conclusion that the second hand goods are in fact acquired for the purpose of sale.

The Determination acknowledges the decision of the Federal Court in Leaseplan Australia Limited v Commissioner of Taxation [2009] FCA 130. In that case it was accepted that neither a sole or dominant purpose test applied, and the test was whether the sale was “a purpose” for which the vehicles were supplied. In Leaseplan the Court found that the taxpayer had a dual purpose in acquiring motor vehicles, namely to lease them and to sell them at the end of the lease. The issue is therefore whether the evidence establishes the existence of a dual purpose. In Leaseplan the existence of the dual purpose was supported by the terms of the contractual arrangements between the parties which envisaged the sale of the vehicles at the end of the lease.

As noted in the Determination, the issue:

…requires careful consideration of the circumstances surrounding the acquisition of second hand goods, particularly where the acquirer carries on a business involving the leasing and selling of second-hand goods. In that context, consideration of how the entity conducts its business, and contractual arrangements under which it acquires and leases second-hand goods is necessary to determine whether subsection 66-6(1) is satisfied.

The Determination also states that the existence of a mere intention that the second-hand goods will ultimately be sold is not sufficient. For example, a tradesman buys a second hand ute for his business, with the intention that the ute will ultimately be sold.

The above matters do not appear controversial. However, when you read the Determination it appears that the Commissioner takes the view that second goods will only be acquired for a “dual purpose” of leasing and sale where the contractual documents expressly contemplate the sale of the goods (see the third dot-point above). In my view, this is an unduly narrow approach. In Leaseplan, the question was whether “the evidence” established the existence of a dual purpose in acquiring the vehicles. That the contract expressly provides for the sale of the vehicle at the end of the lease term certainly provides strong evidence of that dual purpose, but in my view it would be open to establish that dual purpose even where it was not expressly contemplated in the contract. For example, by evidence that the acquirer always or regularly sold the goods at the end of a particular period or evidence that the estimated residual sale value was a factor taken into account when negotiating the price paid for the goods.

Commissioner publishes Decision Impact Statement for Naidoo and s 105-65 – no more Part IVC review

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Today the Commissioner published a Decision Impact Statement for the decision of the Tribunal in Naidoo and Commissioner of Taxation [2013] AATA 443 where the Tribunal:

  • rejected the Commissioner’s contention that the applicant was still obliged to pay GST in the relevant period by relying on s 105-65 of Schedule 1 to the TAA and the issue of a GST assessment for a positive net amount – even though the applicant was not carrying on an enterprise;
  • found that it had no jurisdiction to hear an application to review a decision of the Commissioner with respect to s 105-65

My post discussing the decision can be accessed here.

The Decision Impact Statement confirms that the Commissioner accepts the decision of the Tribunal, and also that:

  • s 105-65 does not apply to extent that an additional amount of GST is included in a net amount, but the net amount itself is not overpaid (eg, where the additional GST is offset by overclaimed input tax credits); and
  • the Tribunal has no jurisdiction to consider an application with respect of the Commissioner’s refusal to exercise his discretion under s 105-65 to refund overpaid GST.

The effect of the finding on jurisdiction is that taxpayers who are not happy with the Commissioner’s refusal to exercise the discretion in s 105-65 are not able to utilise the review procedures in Part IVC of the Taxation Administration Act (including objection rights), and taxpayers will be forced to initiate judicial review proceedings, for example in the Federal Court under s 39B of the Judiciary Act. The absence of review rights (in particular, the absence of any right to object) severely constrains the ability of taxpayers to dispute a decision of the Commissioner to refuse to refund overpaid GST and will force taxpayers into costly and time-consuming administrative law proceedings in the Federal Court.

The Decision Impact Statement outlines the Commissioner’s proposed administrative treatment going forward.

The first point to note is that where taxpayers have paid money to the Commissioner as a result of the application of s 105-65 in similar circumstances to the Naidoo case (ie, where the Commissioner found that the taxpayer was not carrying on an enterprise), refunds may be available.

The second is that the position re review rights is addressed as follows:

  • where the Commissioner makes a decision refusing to exercise the discretion, he will advise the taxpayer that they have a right to seek judicial review of the decision – although the Commissioner states that, on request, he will conduct an informal review of decisions involving the exercise of the discretion
  • where a taxpayer self assesses a refund on the presumption that the Commissioner will exercise the discretion in their favour, the Commissioner may recover any refund paid as an “administrative overpayment” under s 8AAZN of the TAA

The third point outlines how the Commissioner will administratively deal with the impact of the finding in Naidoo that s 105-65 does not impact on the “net amount” of the taxpayer. The approach is as follows (emphasis added):

Where a taxpayer is found to have overpaid GST in circumstances where section 105-65 applies, the taxpayer’s assessment of net amount for the relevant tax period will be amended to reflect the correct net amount for the tax period. However, unless the Commissioner exercises his discretion to pay a refund under section 105-65, an adjustment will be made to the taxpayer’s account to reflect the amount that is not being refunded because of the operation of section 105-65.

It appears that the Commissioner accepts that where the taxpayer’s assessment of net amount includes GST that was not payable, that net amount must be reduced accordingly. In the absence of s 105-65, that would trigger an obligation on the Commissioner to refund that excess net amount (under s 8AAZLF of the TAA to the extent that the taxpayer was in a positive tax position, and under s 35-5 of the GST Act to the extent that the taxpayer was in a negative tax position). This will be addressed by the taxpayer’s Running Balance Account being adjusted to cancel out the excess.

New GST Ruling on adjustment notes plus legislative instruments on adjustment note requirements

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Yesterday the Commissioner published GSTR 2013/2 ‘Goods and services tax: adjustment notes’ which replaces GSTR 2000/1 (which has now been withdrawn). A number of Legislative Instruments were also made dealing with issues relating to adjustment note requirements, being:

GSTR 2013/2 – Adjustment notes

The Ruling sets out the requirements for adjustment notes under Division 29 of the GST Act, in particular:

  • when a document is in the approved form for an adjustment note;
  • the information requirements that the Commissioner has determined under paragraph 29-75(1)(c) of the GST Act, and an explanation of how those information requirements in the A New Tax System (Goods and Services Tax) Adjustment Note Information Requirements Determination 2012 apply; and
  • when the Commissioner will treat a particular document as an adjustment note even though that document does not meet all of the adjustment note requirements under subsection 29-75(1).

Also, the Ruling includes a helpful appendix summarising the circumstances when a decreasing adjustment can be attributed without an adjustment note as determined by the Commissioner under subsection 29-20(3).

Tribunal hands down decision on “increasing adjustments” under Division 135 on the purchase of apartments

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The decision of the Federal Court earlier this year in MBI Properties Pty Ltd v Commissioner of Taxation could be described as the “son of South Steyne”. Yesterday the Tribunal handed down its decision in The Hotel Apartment Purchaser and Commissioner of Taxation [2013] AATA 567 which involves the same apartment complex  and a decision which could be described a the “grandson” of South Steyne.

The case involved the taxpayer’s liability to “increasing adjustments” under Division 135 of the GST Act with regards to the purchase of two apartments in the Sebel Manly Beach Complex. The purchase was treated as a going concern and the Commissioner claimed that the taxpayer had increasing adjustments because of continuing input taxed supplies made in relation to the apartments. A further issue was whether the Commissioner was too late in making the assessment (the Notice to Pay was issued more than four years after the end of the tax period, but before the date of lodgement of the BAS). The Tribunal affirmed the Commissioner’s decision.

The Tribunal also briefly discussed the ability of a “partnership” (being an entity for the purposes of the GST law) to apply for review under Part IVC of the TAA.

My analysis of the decision can be accessed here.

Commissioner publishes administrative treatment of GST refunds pending the introduction of Division 142

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On 26 June 2013 the Tax Laws Amendment (2013 Measures No.4) Bill 2013 was introduced into the House of Representatives which proposed to repeal s 105-65 of Schedule 1 to the TAA and introduce Division 142 into the GST Act. Yesterday the Commissioner published his administrative treatment pending the enactment of the proposed laws. That treatment can be accessed here.

The publication notes that the Bill, as introduced, modifies the application of the amendments so that they  are intended to apply to refund claims relating to tax periods starting on or after 17 August 2012, but only for claims lodged on or after the date the Bill was introduced into the House of Representatives (26 June 2013).

The publication then outlines the following administrative treatment:

The ATO will apply the existing law and follow current procedures until the proposed law is enacted where taxpayers:

    • are required to write to the Commissioner to claim a refund of overpaid GST as a result of a mischaracterisation of a supply (for example, a supply is treated as taxable but is actually GST-free), and
    • are not required to write to the Commissioner to claim a refund of overpaid GST as a result of a miscalculation of an amount of GST payable (for example, the amount of GST payable was incorrectly calculated on a taxable supply of real property using the margin scheme), and can instead self-assess their claim to a refund of overpaid GST.

After the new law is enacted, taxpayers will need to review their circumstances regarding their claims for refunds of overpaid GST made during the period between the date the legislation was introduced into the House of Representatives and enactment.

If a taxpayer is required to seek amendments and the amendments result in an increase in their liability there will be no shortfall penalties or interest imposed where if the amendments are made within 28 days after enactment. Otherwise the full GIC will apply from the date of enactment.

If amendments reduce a taxpayer’s liability, appropriate interest on any overpayment will be paid.

The effect is that those taxpayers who may benefit from the current rules (eg, those taxpayers who have overpaid GST by reason of a miscalculation under the margin scheme) may seek a refund of GST. However, when the new provisions come in, it appears that the Commissioner will give such taxpayers 28 days to pay back that refund (unless they satisfy the provisions in the proposed Division 142) or be exposed to full GIC.

This administrative treatment is similar to that put in place previously, where the Bill was published as an exposure draft (my post on that treatment can be accessed here). However, an important difference  is that, as noted in an earlier post, due to the Federal election being called, the Bill has now lapsed, meaning that:

  • there is no “proposed law” or “new law” waiting to be enacted; and
  • there is no relevant date that “the legislation was introduced into the House of Representatives”

It may be that after the election the government of the day will re-introduce the Bill into the newly formed House of Representatives, and it may be that such a Bill will have transitional provisions which are similar to the Bill which was introduced into the House before the election was called, including provisions which retrospectively require taxpayers to disgorge refunds validly claimed under the current law. However, at the present time, that must be regarded as speculation. In this context, one must question the foundations upon which the Commissioner’s published administrative treatment is based.

International cases update – July 2013 – when is an asset owned by a partnership?

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In July 2013 the following cases dealing with VAT and GST were handed down in the UK and New Zealand.

This month I discuss the decision of the UK First Tier Tribunal in Wrag Barn Golf & Country Club v Revenue & Customs [2013] UKFTT 406 which involved the difficult question of determining what are the assets of a partnership and what is the property of an individual partnership. That is an important question in the context of Australian GST because the effect of s 184 of the GST Act is to make a partnership a separate “entity” for the purposes of GST and it is the partnership which is required to account for GST if those assets are disposed of (although the partners are jointly and severally liable). My analysis of the decision can be found here.

I also note the decisions of the Tax Court of Canada in Kaur v The Queen 2013 TCC 227  and McKenzie v The Queen 2013 TCC 239 which involved the question of whether the director was personally liable for the unpaid GST of a company. The basis of the claim is similar to the Director Penalty regime in Australian whereby directors can be personally liable for a company’s unpaid PAYG withholdings and superannuation contributions for employees. At present, the regime in Australia does not extend to unpaid GST of companies. One does wonder whether Treasury has plans to extend the regime to unpaid GST at some future date.

New Zealand

Taxation Review Authority

XX (An Exporter) v Commissioner of Inland Revenue [2013] NZTRA 4

  • whether the supply of stainless steel spheres to a UK based company zero-rated as an export of goods – whether goods exported or used in New Zealand first in the manufacture of a sculpture and subsequently exported to the UK by another party

United Kingdom

First Tier Tribunal

Astral Construction Ltd v Revenue & Customs [2013] UKFTT 374

  • VAT – zero rating – building work – construction of residential care home integrating existing church – whether taken out of zero rating by being works of enlargement, extension, or conversion – Value Added Tax Act 1994 Schedule 5 Group 8 Item 2 – appeal allowed

Basslabs Ltd v Revenue & Customs [2013] UKFTT 383

  • VAT – transfer of VAT registration number – s 49 VATA 1994 – Reg 6 General Regs 1995 – HMRC refusal to transfer VAT number – evidence of no transfer of a going concern – Appeal dismissed

Bryan Burton v Revenue & Customs [2013] UKFTT 401

  • VALUE ADDED TAX – DIY builders scheme – conversion of barn adjacent to a dwelling (a listed building) to enlarge the dwelling – whether the works were ‘a residential conversion’ within the meaning of section 35(1A)(c) VATA – whether works consisted in the conversion of a “non-residential building” or a “non-residential part of a building” into a building designed as a dwelling or a number of dwellings – held they were not – the works were therefore not a ‘residential conversion’ within section 35 VATA – whether the Tribunal could consider and give effect to any legitimate expectation of the appellant that he would qualify for a refund under section 35 VATA – held, following HMRC v Abdul Noor [2012] UKUT 071 (TCC), that the Tribunal had no jurisdiction to consider the question of legitimate expectation – appeal dismissed

Chelmsford College v Revenue & Customs [2013] UKFTT 400

  • Value added tax – construction of an annexe to an existing building –current use of the building – purpose for which it was designed – capacity for functioning independently – VATA 1994 Sch 8 Group 5 Item 2 – appeal dismissed

Everycar Contracts Ltd & Sabrina Hammon (t/a SJM Group) v Revenue & Customs [2013] UKFTT 405

  • VALUE ADDED TAX – irregular tax invoices evidencing the purchase of cars by the appellants – the tax invoices irregular in that instead of giving the appellants’ names and addresses they gave the names and addresses of third parties who were aliases for the appellants – whether HMRC’s refusal to exercise their discretion to accept alternative evidence of entitlement to input tax was reasonable as a matter of domestic public law – held on the facts that it was – whether HMRC’s refusal contravened the Community Law principle of effectiveness – held on the facts that it did not – appeal dismissed

Oliver’s Village Cafe Ltd v Revenue & Customs [2013] UKFTT 396

  • VALUE ADDED TAX – Cancellation of registration – whether registration correctly made originally – yes – whether cancellation of registration made effective from the correct date – no, it should have been effective from 11 June 2009 rather than 11 September 2009 because the appellant had made the request for cancellation on the earlier date – paragraph 13(1), Schedule 1, VATA 1994 applied – appeal allowed in part

Palatial Leisure Ltd v Revenue & Customs [2013] UKFTT 396

  • VALUE ADDED TAX – partial exemption – whether attribution of input tax under regulation 101 of the VAT Regulations 1995 can take account of a taxable use of goods in a period more remote than the end of the prescribed accounting period in question which is brought about by a change in the law making what were formerly exempt supplies taxable supplies – held it cannot – appeal dismissed

Silvergum Solutions Ltd v Revenue & Customs [2013] UKFTT 397

  • VALUE ADDED TAX – VAT on supplies made to appellant – whether input tax deductible by appellant – supplies not used by appellant in its business or for making taxable supplies – supplies instead used in the business of an associated company which was a partially exempt trader – held the VAT in these circumstances was not the appellant’s input tax – appeal dismissed

Wrag Barn Golf & Country Club v Revenue & Customs [2013] UKFTT 406

  • VAT – option to tax land – whether golf course land was asset of Appellant at time of election to waive exemption – yes – whether golf course land was asset of Appellant at later time – yes – whether Appellant made supplies of land – yes – whether supplies taxable by virtue of election to waive exemption – yes 

Update on GST refunds – Bill introducing Division 142 has lapsed

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On 26 June 2013 the Tax Laws Amendment (2013 Measures No.4) Bill 2013 was introduced into the House of Representatives which proposed to repeal s 105-65 of Schedule 1 to the TAA and introduce Division 142 into the GST Act. Due to the Federal election being called the Bill has now lapsed. This means that the provisions of s 105-65 of Schedule 1 to the TAA will continue to apply to the payment of GST refunds.

This is good news for those taxpayers who have overpaid GST by reason of a “miscalculation” of GST (eg, under the margin scheme) as the Commissioner accepts that s 105-65 does not apply in those circumstances.

I also note that the transitional provisions in the Bill to introduce Division 142 provided that the new provisions would apply to tax periods starting on or after 17 August 2012, but that taxpayers could rely on the previous laws where they had done one of the following by 26 June 2013, being the date the Bill was introduced into the House (referred to as “the introduction day”):

  • if an amendment is made to an assessment, or is applied to be made, before the introduction day;
  • if an objection is made before the introduction day.

The Bill may well be re-introduced after the election and if so, the provisions may also apply to tax periods starting on or after 17 August 2012. With that in mind, taxpayers who believe that they may have an entitlement to a refund of GST may be able to protect their refund rights under the existing law by applying to amend their assessments or objecting to their assessments. Of course, whether that course of action would be effective would very much depend on the form of the transitional provisions in the re-introduced Bill.

Commissioner publishes PSLA 2013/3 on the treatment of input tax credits and s 105-65 of Schedule 1 to the TAA

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Today the Commissioner published PSLA 2013/3 (GA) ‘Treatment of input tax credits claimed by a recipient of a non taxable supply where the Commissioner has a discretion to give a refund of the overpaid GST to the supplier due to the operation of section 105-65 of Schedule 1 to the TAA’.

The purpose of the Practice Statement is stated to be as follows:

To explain the circumstances in which the Commissioner will use his powers of general administration to allow a recipient to retain an input tax credit that is claimed where a transaction was incorrectly treated by a supplier as giving rise to a taxable supply.

The PSLA was originally issued as Draft PSLA 3521 – Treatment of input tax credits claimed by a recipient where the Commissioner does not give a refund to the supplier due to the operation of s 105-65 of Schedule 1 to the TAA.

The Practice Statement provides that a recipient will generally not be required to repay over-claimed input tax credits or pay any general interest charge related to the over-claimed credits where the following circumstances apply:

  • a supply has incorrectly been treated as taxable to any extent;
  • the supplier is registered for GST and has overpaid GST;
  • the supplier has issued a tax invoice to the recipient;
  • the recipient has over-claimed an input tax credit and would have been entitled to claim that input tax credit if the supply had been a taxable supply;
  • the recipient has treated the acquisition as a creditable acquisition when applying other taxation laws such as the income tax law and the fringe benefits law;
  • should the supplier request a refund, section 105-65 would apply such that the Commissioner need not refund the supplier the overpaid GST; and
  • the Commissioner has not given a refund of the overpaid GST to the supplier.

This approach is referred to as the ‘preserving the status quo approach’.

The status quo approach will not apply in the following cases (and the Commissioner will generally seek to recover the over-claimed input tax credits):

  • where the Commissioner exercises his discretion under s 105-65 to pay a refund
  • where the supplier reimburses the recipient for the GST incorrectly included in the price for the supply

As I noted in my discussion on the draft PSLA, the Practice Statement is interesting because it effectively operates as an administrative override of the provisions of the GST Act and the TAA, which cause the recipient to have a “GST shortfall” in  circumstances where input tax credits have been incorrectly claimed. The recipient is also exposed to recovery and the imposition of penalties and interest. The Commissioner considers that applying his general powers of general administration, “it is appropriate for the Commissioner not to take any compliance action to reverse a transaction” in the particular circumstances.

However, it should be noted that to the extent that the Commissioner does not (or chooses not to) follow the Practice Statement, the law will otherwise apply.  In this regard I not that the Practice Statement states that a recipient will “generally” not be required to repay input tax credits.

Where there is truly a “status quo”, in the sense that GST was paid and credits were claimed, one can see the administrative ease of such an approach and there would be appear to be no reason why the Commissioner should not follow the statement.  However, the matter may not be so clear where credits are claimed but for some reason the Commissioner is out of pocket (e.g., the supplier pays the GST and then goes into liquidation and the Commissioner is required to disgorge the payments as a preference claim).  In such circumstances the practice statement would afford the recipient no protection if Commissioner sought to recover the over claimed credits from the recipient.

Paper published on GST refunds and Division 142

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As noted previously on this site, on 26 June 2013 the Tax Laws Amendment (2013 Measures No.4) Bill 2013 was introduced into the House of Representatives which would repeal s 105-65 of Schedule 1 to the TAA and introduce Division 142 into the GST Act.

Rather than restrict my analysis to Division 142, I have completed a paper entitled “Refunds of overpaid GST: from s 105-65 to Division 142 – where did we come from, how did we get here and where are we going?” which takes a detailed look at the troubled history of s 105-65 and also provides an analysis of the proposed provisions in Division 142. The aim of the paper is to outline the historical context in which Division 142 has been introduced as well as my views on the provisions themselves. My paper can be accessed here.

Tribunal decision on sale of property under vendor finance agreement

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Yesterday the Tribunal handed down its decision in Rod Mathieson Truck Hire Pty Ltd as trustee for the Mathieson Family Trust and Commissioner of Taxation [2013] AATA 496 which affirmed the decision of the Commissioner that the taxpayer was liable for GST on the entire amount of consideration payable for the sale of land, notwithstanding that part of the consideration was lent to the purchaser under a vendor finance arrangement and the loan was only partially repaid.

The case illustrates the need to take care in structuring transactions and that different GST outcomes can arise out of transactions which on the surface may appear the same, but have different legal outcomes.

The facts were as follows:

  • the taxpayer agreed to sell property to the purchaser for a price of $3,177,650 plus GST.
  • the purchaser was unable to pay the whole amount of the purchase price and at settlement the purchaser paid the sum of $2,017,885 and the parties into a document described as a Settlement Balance Facility Agreement (whereby the taxpayer advanced the sum of $1,498,682.69 to the purchaser which was to be paid to the vendor at settlement).
  • The advanced monies required to be repaid after settlement, but payment was not made. A deed of variation was subsequently entered into whereby $500,000 was to be paid and three developed lots were to be transferred to the taxpayer – the money was paid, but the lots were never transferred

The Commissioner contended that the taxpayer had received full consideration for the transfer of the land at settlement, being the payment of $2,017,895 and $1,477,520 through the Settlement Balance Facility Agreement. Both these payments fell within the definition of “consideration” in s 9-15 of the GST Act.

The taxpayer contended that it was erroneously made liable to account for GST on consideration which was promised but had not been received. It contended that the proper approach was to look at the substance and reality of the transaction which amounted to a deferral of payment of the purchase price under the contract of sale (part of which was never paid). Alternatively, the loan transaction (if properly so-called) was simply ancillary to a single or dominant supply under the contract of sale.

The Tribunal distinguished between this case (being a loan of part of the purchase price) and one where a sale is made on credit, which may well have had a different GST outcome. As noted at [23]:

However, there is a clear distinction between a sale on credit and the dealings here between the Trust and the Purchaser. The contract for sale did not provide for any form of credit and it was not varied to do so. There may have been other options than the one employed by the parties when it became apparent that the Purchaser did not have the money to complete. A differently structured solution, in the circumstances that transpired, may have led to a different GST outcome. However, the Trust and the Purchaser adopted the method outlined above, and the fact that things did not turn out as planned is not an opportunity to recast what has already occurred.

The Tribunal concluded that there was plainly a loan agreement and a loan. Further, the obligation to advance the loan monies was set-off at settlement against the purchaser’s obligation to pay for the Property (thereby constituting full consideration). Thereafter, the taxpayer’s rights against the purchaser were not under the Contract of Sale (eg, as recovery of unpaid purchase price), but under the Settlement Balance Facility Agreement and the Mortgage which secured the loan.