Macquarie Retail Pty Ltd v Dexus Capital Funds Management Ltd [2024] NSWSC 1413

Coffee and a Case Note

“Hey! You can’t transfer your shopping centre stake to them!”

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Two contracts governed the relationship between co-owners of a large, suburban shopping centre: [1]

In 2012 the co-owners were P as to 50%, and two other entities in the same group for 25% each: [2]

The arrangement contained rights regarding share transfers; the breach of which allowed the non-breaching party to automatically buyout the breaching party’s stake: [5]

In 2014, after some compliant share transfers, the ownership structure became 50/50: [7], [8]

In 2022, following a restructure of middling complexity (to this humble litigator!), P’s co-owner transferred its shares to another entity in that group: [10], [25] - [34]

Crucially the transferee (who was one of the Ds) did not fall within the relevant definition “Related Corporation”: [35]

P said this transfer was a breach and triggered P’s rights to buy their co-owners out of the property: [11]

The operation of the clauses dealing with transfers of interests were considered closely: [13] - [24]

P and the Ds exchanged (chiefly by emails between their solicitors) corro with the Ps asserting the transfer was a Prohibited Disposal (as defined) and pressing for a sale at $830m: [40] - [54]

The sale did not proceed. P commenced proceedings: [55]

The Ds resisted, including on the basis of the operation of technical parts of the documents, the structure of the transactions, and the service requirements in relation to the relevant notices: [61]

The Court briefly restated the principles that applied to commercial contractual construction; congruence, the avoidance of commercial inconvenience, avoiding a capricious outcome etc: [70]

The Court found that the a co-owner performing a Prohibited Disposal, and thereby being in default, exposed the entirety of its interest (and not merely, say, a severable proportion) to being bought out: [95]

Regarding notice, notice in writing including email was sufficient - with no additional formal or ceremonial requirement: [103], [106]

From the time the Ds received the notice from their lawyers, compliant notice was provided to the Ds: [109]

Further in relation to the notice question, the Court found that an estoppel contended for by P did not arise whereby giving notice to the Ds’ lawyers was sufficient to comply with the contract was not made out: [115], [116]

(However, as mentioned, relevant notice requirements were complied with.)

The Court found P was entitled to specific performance of the contract for P’s purchase of the relevant D’s interest in the shopping centre: [117]

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