Dexus Capital Funds Management Ltd v Macquarie Retail Pty Ltd as trustee for Macquarie Retail Trust

[2025] NSWCA 68

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Dexus Capital Funds Management Ltd v Macquarie Retail Pty Ltd as trustee for Macquarie Retail Trust [2025] NSWCA 68

Hearing dates:

31 March 2025

Decision date:

11 April 2025

Before:

Kirk JA at [1]
Adamson JA at [2]
Ball JA at [99]

Decision:

(1)   Dismiss the appeal.

(2)   Note the cross-appeal is not pressed and dismiss the cross-appeal.

(3)   Order the appellants to pay the respondent’s costs.

Catchwords:

APPEALS — Contracts — Construction — where two co-owners agreements (COA) govern relationship between co-owners of large suburban shopping centre — where pre-emption rights on defaults and deemed defaults by co-owners in dealing with that co-owner’s ownership interest entitle non-defaulting owners to purchase defaulting co-owner’s ownership interest — whether two separate transactions effecting a transfer of ownership interests were prohibited disposals triggering pre-emption rights — whether second COA had a greater effect than to substitute an outgoing co-owner with an incoming co-owner — whether ownership interest was acquired “under” clauses regulating dealing and establishing pre-emption rights — whether service provisions ought be construed as essential

Legislation Cited:

Corporations Act 2001 (Cth), s 50

Cases Cited:

Bond v Hongkong Bank of Australia Ltd (1991) 25 NSWLR 286

Charrington & Co Ltd v Wooder [1914] AC 71

Donau Pty Ltd v ASC AWD Shipbuilder Pty Ltd (2019) 101 NSWLR 679; [2019] NSWCA 185

Hagerty v Hills Central Pty Ltd [2018] NSWCA 200

Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (2015) 256 CLR 104; [2015] HCA 37

Tricontinental Corporation Ltd v HDFI Ltd (1990) 21 NSWLR 689

Category:

Principal judgment

Parties:

Dexus Capital Funds Management Ltd (First Appellant)
Dexus Falcon Pty Ltd (Second Appellant)
Macquarie Retail Pty Ltd as trustee for the Macquarie Retail Trust (Respondent)

Representation:

Counsel:
D L Williams SC / A Munro SC / K Sharma (Appellants)
J Arnott SC / C Winnett (Respondent)

Solicitors:
Herbert Smith Freehills (Appellants)
Norton Rose Fulbright (Respondent)

File Number(s):

2024/460260

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Equity – Commercial List

Citation:

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

Date of Decision:

8 November 2024

Before:

Hammerschlag CJ in Eq

File Number(s):

2023/432602

HEADNOTE

[This headnote is not to be read as part of the judgment]

This case concerned the construction of two co-owners’ agreements which governed the rights of co-owners of the Macquarie Shopping Centre, a large shopping centre in North Ryde, NSW (the Property).

The first co-owners’ agreement, entered into on 25 October 2012 (COA12), contained clauses regulating dealing, which included pre-emption rights giving priority right of purchase to Minority Co-Owners to acquire the interest of another Minority Co-Owner who wished to deal with their interest (cl 8.1(a)). An exception to these pre-emption rights was provided where the acquirer of the interest was “a member of that Co-Owner’s Co-Owner’s Group” (cl 8.1(b)(i)). COA12 further provided that, where a Co-Owner had acquired their interest under these provisions, any further transaction which would cause that Co-Owner to “cease to have the characteristics which qualify it as a member of that Relevant Co-Owner’s Group” would be a deemed Prohibited Disposal and Default (cl 8.2). In the event of Default, COA12 provided a mechanism for a Co-Owner to acquire the interest of the Defaulting Co-Owner, including by serving notices and unconditional contracts of sale on the Defaulting Co-Owner (cl 12). COA12 provides for the form of notice, including that it be “marked for the attention of the person specified in the Details”, and “be left at the address of the addressee” or another address for which the addressee gives notification (cl 13) or sent to a nominated facsimile number. COA12 did not contain details of a facsimile number or a person for whose attention a notice must be marked. The same address was listed for all parties.

The second co-owners’ agreement, entered into on 22 October 2014 (COA14), was shorter, and provided that COA12 was “discharged and a new contract … created on the same terms and conditions” as COA12 (“that Contract”), with certain exceptions, including that “notices to the Incoming Party must be provided using its details specified in this document” (cl 1(a)). As with COA12, no facsimile number or person to whose attention a notice must be marked was stipulated and the same street address was listed for all parties.

Immediately prior to October 2021, there were two Co-Owners of the Property, Macquarie Retail Pty Ltd (Macquarie Retail) and AMP Capital Funds Management Ltd (AMPCFM). AMPCFM had acquired its first 25% share from an outgoing Co-Owner on 31 May 2013 (the first 25% interest) and its second 25% share from a different outgoing Co-Owner on 22 October 2014 (the second 25% interest). In April 2021, the AMP Capital Diversified Property Fund (of which AMPCFM was the responsible entity) merged with Dexus Wholesale Property Fund, at which point Dexus Wholesale Property Ltd (Dexus Wholesale) became the responsible entity. On 13 October 2021, AMPCFM transferred a 25% share in the Property to Dexus Wholesale. On 22 October 2021, Dexus Wholesale gave notice to AMPCFM that it wished to deal with its interest in the Property by selling its 25% share and offered AMPCFM the first right to acquire the interest. On 31 January 2022, Dexus Wholesale transferred its 25% share to AMPCFM. On 24 March 2023, AMP Ltd transferred all of its shares in AMPCFM to Dexus Falcon Pty Ltd (Dexus Falcon), an entity within Dexus group and outside the AMP Group. The result of this transfer was that AMPCFM ceased to be a Related Corporation of AMP Ltd.

On 30 March 2023, Norton Rose Fulbright (NRF) (acting for Macquarie Retail) wrote to AMPCFM enclosing a notice pursuant to the COA, alleging that the acquisition of shares by Dexus Falcon resulted in a deemed Prohibited Disposal and Default under the COA. Herbert Smith Freehills (HSF) (acting for AMPCFM) responded on 31 March 2023, asking for further correspondence to be sent by email to four nominated solicitors within the firm. On 28 April 2023, NRF purported to serve a notice on AMPCFM (that it was exercising its rights under the COA to purchase AMPCFM’s share in the Property) by sending it by email to HSF. On 26 May 2023, Macquarie Retail engaged a valuer to determine the market value of AMPCFM’s share. On 7 July 2023, NRF purported to serve a notice of purchase on AMPCFM by emailing HSF. On 21 July 2023, NRF sent HSF an unconditional contract for the purchase of all of AMPCFM’s 50% interest in the Property (the contract of sale) for the sum of $830 million, being the value of AMPCFM’s share in the Property as determined by the valuer. AMPCFM maintained that it was not bound by the contract of sale.

By summons filed 29 November 2023, Macquarie Retail sought:

1. A declaration that the 24 March 2023 transfer gave rise to a deemed Prohibited Disposal and Default; and

2. Specific performance from AMPCFM by execution of the contract of sale.

The primary judge granted specific performance.

AMPCFM appealed to this Court, alleging that:

1. The primary judge erred in finding that the acquisition of the first 25% interest had been an acquisition under COA14, as the acquisition of the first 25% interest preceded the Effective Date of COA14 (grounds 1 and 2);

2. The primary judge erred in finding that the acquisition of the second 25% interest had been an acquisition under the dealing clause (cl 8.1 of COA12) incorporated in COA14, rather than under clauses containing the procedure for the exercise of pre-emption rights (cll 9.2 to 9.7 of COA12) (grounds 3 and 4);

3. The primary judge erred in construction of the phrase “Relevant Co-Owner’s Group” (ground 5);

4. The primary judge erred in finding that, if there was a deemed Prohibited Disposal in respect of either of AMPCFM’s 25% interests, Macquarie Retail was entitled to acquire the whole of AMPCFM’s interest (ground 6); and

5. The primary judge erred in finding that the service requirements incorporated from COA12 into COA14 (cll 12 and 13) were not strict and that Macquire Retail had given valid notice to AMPCFM (ground 7).

The Court held (Adamson JA, Kirk and Ball JJA agreeing), dismissing the appeal, with costs:

Grounds 1 and 2:

1. The provision in COA14 for a new contract “on the same terms and conditions as [COA12]” is intended to encompass acquisitions that have occurred under COA12 and before the Effective Date of COA14. The construction for which AMPCFM contends is inconsistent with the words and commercial purpose of the contract: [50]-[63].

Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (2015) 256 CLR 104; [2015] HCA 37; Charrington & Co Ltd v Wooder [1914] AC 71, applied.

Donau Pty Ltd v ASC AWD Shipbuilder Pty Ltd (2019) 101 NSWLR 679; [2019] NSWCA 185, distinguished.

Grounds 3 and 4:

1. As AMPCFM’s right to acquire the second 25% interest from the outgoing Co-Owner was conferred under cl 8.1 of the COA, it acquired the interest “under cl 8.1” and not under cll 9.2 to 9.7 which merely outlined the procedure whereby acquisition was effected: [64]-[69].

Ground 5:

1. The reference to “that Relevant Co-Owner’s Group” in cl 8.2 is a reference to the group denoted by the earlier use of the phrase, namely, the group to which the transferee was a member at the time it acquired its interest: [70]-[74].

Ground 6:

1. It is not necessary to address ground 6 because it does not arise: [75]-[76].

Ground 7:

1. The notice requirements in cl 13 of the COA ought not be construed as essential, in circumstances where the parties failed to nominate either a person to whose attention a notice ought be marked or a facsimile number to which a notice ought be sent (as required by cl 13.2) and specified the same address for all parties in circumstances where it was within the parties’ reasonable contemplation that at least one party’s address might change during the pendency of the agreement: [77]-[90].

   Tricontinental Corporation Ltd v HDFI Ltd (1990) 21 NSWLR 689; Bond v Hongkong Bank of Australia Ltd (1991) 25 NSWLR 286; Hagerty v Hills Central Pty Ltd [2018] NSWCA 200, distinguished.

Notice of Contention:

1. Though not strictly necessary to determine, HSF had authority to receive notices on behalf of AMPCFM, having given notification to Macquarie Retail through NRF of another means of communication (by email to nominated solicitors) for the purposes of cl 13: [91]-[97].

JUDGMENT

1. KIRK JA: I agree with Adamson JA.

2. ADAMSON JA: This appeal turns on the construction of contracts which governed the rights of co-owners of the Macquarie Shopping Centre (the Property), a large shopping centre in North Ryde, which is to the northwest of the centre of Sydney.

3. From 25 October 2012, the time of the first relevant agreement between the co-owners (COA12, see below), until 2022, each co-owner was either a member of the Australian Mutual Provident Society (AMP) group or was a responsible entity of an AMP fund. In 2022, the shares in Macquarie Retail Pty Ltd as trustee for the Macquarie Retail Trust (the respondent, or Macquarie Retail), were transferred to a non-AMP entity. This transaction did not bear on the issues in the present appeal.

4. Of present relevance, on 24 March 2023, AMP Ltd sold all of its shares in the first appellant (AMPCFM), which was then the only other co-owner of the Property, to an unrelated company, Dexus Falcon Pty Limited (Dexus Falcon), the second appellant. Macquarie Retail claimed that this change of ownership entitled it to purchase AMPCFM’s 50% share in the Property. When AMPCFM resisted that claim, Macquarie Retail sought to enforce its alleged rights by seeking specific performance of the agreement in the Equity Division of the Supreme Court. AMPCFM and Dexus Falcon appeal against the orders made by Hammerschlag CJ in Eq (the primary judge) for specific performance.

5. Because the submissions of the appellants at first instance correspond with the arguments which they advance on appeal, it is convenient to summarise the chronology and the agreements before addressing the grounds of appeal.

The agreements

The identity of the co-owners of the Property at relevant times

6. In order to appreciate the context in which the relevant agreements were made it is helpful to have an overview of the identity of the co-owners of the Property during the relevant time period. The abbreviations used are generally the same as in the primary judge’s reasons (see key below).

25 October 2012 (date of COA12) – 30 May 2013
Macquarie Retail / 50%	ACPP / 25%	ASCF / 25%
31 May 2013 – 21 October 2014
Macquarie Retail / 50%	ACPP / 25%	AMPCFM / 25%
22 October 2014 (date of COA14) – 12 October 2021
Macquarie Retail / 50%	AMPCFM / 50%
13 October 2021 – 30 January 2022
Macquarie Retail / 50%	Dexus Wholesale / 25%	AMPCFM / 25%
31 January 2022 – 23 March 2023
Macquarie Retail / 50%	AMPCFM / 50%
From 24 March 2023 (when AMP Ltd transferred all the shares in AMPCFM to Dexus Falcon)
Macquarie Retail / 50%	AMPCFM / 50%

Key

ACPP	ACPP Retail Pty Ltd as trustee of the ACPP Retail Trust.
ASCF	AMP Capital Investors Pty Ltd as responsible entity of the AMP Capital Shopping Centre Fund.
AMPCFM	AMP Capital Funds Management Ltd, which was until 24 March 2023, a wholly owned subsidiary of AMP Ltd. It was the responsible entity of the AMP Capital Diversity Property Fund until April 2021 when Dexus Wholesale assumed that role. On 24 March 2023, AMP Ltd transferred all its shares in AMPCFM to Dexus Falcon, which was ultimately owned by Dexus Holdings. It is now known as Dexus Capital Funds Management Ltd and was the first defendant in the Court below and is the first appellant in this Court.
COA12	A co-owners’ agreement entered into between the then co-owners and associated entities on 25 October 2012 (referred to by the primary judge as “the Agreement”).
COA14	A co-owners’ agreement, also known as the Accession Deed, entered into between the then co-owners and associated entities on 22 October 2014.
Dexus Falcon	The company to which AMP Ltd transferred all the shares in AMPCFM on 24 March 2023.
Dexus Holdings	Dexus Holdings Ltd, the ultimate holding company of the Dexus group, including Dexus Falcon.
Dexus Wholesale	Dexus Wholesale Property Ltd, the company which, in April 2021, became the responsible entity of the AMP Capital Diversified Property Fund and thereby assumed the rights and obligations of AMPCFM in relation to that fund. It was treated as a member of the AMP Group under COA14 because it held its interest in the Property as the responsible entity for an AMP Fund. It transferred its interest to AMPCFM on 31 January 2022, having invoked the procedure under cll 8.1(a), 9.2 and 9.4 of COA14 (as incorporating COA12).

COA12

7. The text of COA12 and COA14 is contained in schedules to the primary judge’s reasons (Macquarie Retail Pty Ltd v Dexus Capital Funds Management Ltd [2024] NSWSC 1413) and will not be reproduced here. COA12 is the first relevant agreement in a series of so-called accession deeds relating to interests in the Property dating from as far back as 28 May 2003. These previous agreements were in evidence before the primary judge. They are relied on as being relevant to the construction of COA14 but were otherwise irrelevant to the issues before the primary judge.

8. The parties to COA12 and their addresses (which are all the same, as referred to below) are listed at the commencement of the deed. However, there is no “Details” section of COA12. This omission is relevant to ground 7, which deals with the service of notices.

9. Clause 1.1 of COA12 defines “Co-Owners” as meaning Macquarie Retail, ACPP and ASCF “and any other person who holds an interest in the Property as a tenant in common from time to time.” The definition of “Co-Owner’s Group” distinguishes between Co-Owners which are in the AMP Group and those which are not and includes, relevantly, a “Related Corporation”. The definition of “Related Corporation” picks up the definition in s 50 of the Corporations Act 2001 (Cth), which includes a holding company, subsidiary or subsidiary of another company. “AMP Related Corporation” is defined to mean “a body corporate which [c]ontrols AMP or which AMP [c]ontrols, or which is [c]ontrolled by a body corporate which [c]ontrols AMP”.

10. Clause 1.1 includes the following definitions relating to “Default”:

Default means, in relation to a Co-Owner:

(a)   a breach of clauses 6 (Dealings with interests), … 8.2 (Ceasing to be a member of a Co-Owner’s Group) … [or] that Co-Owner has failed to rectify within 10 business days after written notice of the breach has been given to it by any of the other Co-Owners specifying the breach and requesting that the same be remedied within such 10 business day period;

…

Default Buyout means an acquisition of a Co-Owner’s interest in the Property pursuant to clause 12.

Default Interest means the interest in the Property held by the Defaulting Co-Owner.

Default Interest Value means a value equivalent to that proportion of the Net Proceeds of Sale which the Default Interest bears to the whole of the Property.

Default Notice means a notice given by an Injured Co-Owner pursuant to clause 12.1.

Defaulting Co-Owner means a Co-Owner which is in Default.

11. “Net Proceeds of Sale” is defined to mean “the proceeds of sale (excluding auction expenses, selling commission, legal costs and disbursements and other costs and expenses applicable to the sale of the Property) which the Property would be expected to realise upon a sale in the ordinary course of business on the open market between a willing but not anxious purchaser and a willing but not anxious vendor.”

12. Clause 1.2, entitled “Interpretation”, provides that “[i]n this deed unless the contrary intention appears … (g) ‘person’ includes … a body corporate”.

13. Clause 2.1 provides that COA12 commences on its date (25 October 2012) and will terminate, relevantly, on the date a new deed is entered into, with the consent of the parties. Clause 2.2 provides that the termination of COA12 for any reason will not affect the accrued rights and obligations of the parties at the time of termination.

14. Clause 6 provides that no Dealing (which is defined widely) with respect to a Co-Owner’s interest may occur except by way of: a Permitted Transfer in accordance with cl 8; compliance with the pre-emptive rights procedures in cl 9; a Dealing in accordance with cl 11 which provides for deadlocks; a Default Buyout in accordance with cl 12; or with the prior written consent of the other Co-Owners.

15. Clause 6.3(b)(iii) provides:

6.3   Conditions to Dealings

Despite any other provision in this deed, prior to and as a condition to any Dealing the party seeking to Deal with the whole or any part of its interest must:

…

(b)   procure that the Permitted Transferee:

…

(iii)   executes and provides to the other Co-Owners all documents reasonably required by the other Co-Owners in favour of all relevant parties and in forms reasonably acceptable to such parties agreeing to be bound by the terms of:

A.   this deed;

B.   the Management Agreement as are in place (and in accordance with their terms continue to remain in place);

C.   the Development Management Agreement as are in place (and in accordance with their terms continue to remain in place); and

D.   any other document to which the transferring Co-Owner is a party,

with such adaptations and modifications as may be necessary in the circumstances and as agreed by the remaining Co-Owners with the other parties, the Manager and the Development Manager;

…

16. Corresponding provisions were included in the Management Agreement (cl 15.1) and the Development Management Agreement (cl 29), to which the Co-Owners were also parties.

16. The primary judge accepted Macquarie Retail’s submission that the acquisition of AMPCFM’s shares by an entity in the appellants’ group constituted a “Default Buyout” (J [15]). This finding is challenged in grounds 3, 4 and 5.

17. Clause 8 provides, in part:

8.1   Dealing with Co-Owner’s Group

(a) If a Minority Co-Owner wishes to Deal with the whole of its interest in the Property, then:

(i) unless the transferee to that Dealing is:

A. an entity wholly owned by the Beneficial Party relevant to that Minority Co-Owner or a sub trust, all of the units in which are held by that Beneficial Party; or

B. a person referred to in paragraph (d) of the definition of “AMP Fund” in clause 1.1; or

C. the new or replacement trustee or responsible entity of the trust (including an unregistered trust, a trust having an approved deed or registered managed investment scheme) in respect of which:

1) that Co-Owner holds an interest in the Property in its capacity as trustee or responsible entity; or

2) the Beneficial Party of that Co-Owner holds an equitable interest in the Property in its capacity as trustee or responsible entity,

then the other Minority Co-Owner shall have a priority first right to acquire the interest on the terms set out in clause 9.2 to 9.7 (inclusive); and

(ii) if that Minority Co-Owner does not accept the offer under clause 8.1(a)(i), subject to clause 8.1(b), the provisions of clauses 9.2 to 9.16 (inclusive) will apply in relation to the sale of that interest in the Property.

(b) Subject to clause 8.1(a), a Co-Owner is permitted at any time and from time to time to Deal with the whole or any portion of its interest in the Property (without complying with clause 9) where the other party to the Dealing:

(i) is a member of that Co-Owner’s Co-Owner’s Group (Relevant Co-Owner’s Group); or

(ii) is any person referred to in clause 8.1(a)(i).

(c) Any such Dealing must be promptly notified in writing to the other Co-Owners by the Co-Owner Dealing with its interest.

8.2   Ceasing to be a member of Co-Owner’s Group

If a Co-owner which acquired an interest in the Property under clause 8.1 will cease to have the characteristics which qualify it as a member of that Relevant Co-Owner’s Group then, the Permitted Transferee will be deemed to have carried out a Prohibited Disposal and thereby be in Default, it will be deemed a Defaulting Co-Owner unless:

(a) the other Co-Owners otherwise agree in writing; or

(b) that Co-Owner prior to it ceasing to be a member of the Relevant Co-Owner’s Group Deals with all its Interest;

(i) to a person which then qualifies as a member of the Relevant Co-Owner’s Group, and clause 9 does not apply to such Dealing; or

(ii) otherwise in accordance with clause 9.

19. Clause 9 deals with pre-emption rights. Clause 9.1 gives a priority first right to a Minority Co-Owner to acquire the whole or any part of the interest held in the Property by a Co-Owner other than a Minority Co-Owner. Clauses 9.2 to 9.16 set out the procedures to be followed by a Co-Owner which wishes to “Deal” with the whole or any part of its interest in the Property, which effectively provides for a first right of refusal to other Co-Owners.

20. As is apparent from its wording, cl 8.1(a) gives a priority first right to a Minority Co-Owner (such as ACCP, ASCF and certain permitted transferees) to acquire the whole of the interest in the Property of another Minority Co-Owner who wishes to deal with it on the terms set out in cll 9.2 to 9.7. However, that right is not available where the proposed transferee is a specified (effectively in-house) acquirer (see cl 8.1(a)(i)). If the offeree does not take up the offer, the Minority Co-Owner must offer the interest to the other Co-Owners under cll 9.2 to 9.16.

21. Clause 8.1(b)(i) permits any Co-Owner (subject to the priority right of a Minority Co-Owner under cl 8.1(a)) to deal with the whole or any portion of its interest in the Property without complying with cl 9 where the other party to the dealing is, effectively, a member of that Co-Owner’s Co-Owner’s Group, being the Relevant Co-Owner’s Group. “Co-Owner’s Group” is defined in substance to be the Co-Owner and any related corporation or, in the case of a member of the AMP Group, that member, any related corporation and any trustee or responsible entity of any “AMP Fund” in that capacity.

22. Clause 8.2 provides that, if a Co-Owner which acquired an interest in the Property under cl 8.1 ceases to have the characteristics which qualify it as a member of that Relevant Co-Owner’s Group, it will be deemed to have carried out a Prohibited Disposal and be in Default, unless the other Co-Owners agree in writing or, before its status changes, it transfers its interest to another member of the Relevant Co-Owner’s Group.

23. If a Default occurs, cl 12 requires each Co-Owner to give written notice to the other Co-Owners, and within three months of the Default or notice of it, any other Co-Owner (Acquiring Co-Owner) may give notice to the Defaulting Co-Owner that it wishes to exercise its rights under cl 12. It must nominate an independent valuer and require the Defaulting Co-Owner to nominate another independent valuer. Within one month, they must jointly request the valuers to determine the Net Proceeds of Sale (the amount the Property would be expected to realise on the open market), and the Default Interest Value, meaning a value equivalent to that proportion of the Net Proceeds of Sale which the interest in the Property held by the Defaulting Co-Owner bears to the whole of the Property (that is, the market value of the interest). If the Defaulting Co-Owner does not appoint a valuer, the valuer nominated by the Acquiring Co-Owner can proceed unilaterally. Clause 12.11 provides that, within 10 business days after the delivery of the valuer’s determination, a Co-Owner may give notice to the Defaulting Co-Owner that it wishes to purchase all or part of the Default Interest. If no such notice is given, the right to purchase lapses. The construction of cll 12.11 and 13.1 (see below) arises under ground 7.

24. Under cl 12.14, the Acquiring Co-Owner must, within 10 business days of giving notice that it wishes to purchase, deliver an unconditional contract providing for completion 60 days after the contract is entered into, and the Defaulting Co-Owner must execute and exchange it. If the contract is not exchanged within 10 business days of receipt, the Acquiring Co-Owner may take action to enforce its rights by seeking specific performance and the parties agree that damages are not an adequate remedy for non-performance. The Co-Owners may agree in writing to vary any of the procedures set out in the clause: cl 12.17.

25. Clause 13 provides for the giving of notices as follows:

13.1   Form

A notice, approval or consent in connection with this deed:

(a)   must be in writing;

(b)   must be marked for the attention of the person specified in the Details; and

(c)   must be left at the address of the addressee or sent by prepaid ordinary post (airmail if posted to or from a place outside Australia) to the address of the addressee or sent by facsimile to the facsimile number of the addressee which is specified in the Details or if the addressee notifies another address or facsimile number then to that address or facsimile number.

13.2   Effective on receipt

Unless a later time is specified in it a notice, approval or consent takes effect from the time it is received.

13.3   Receipt by post or fax

A letter or facsimile is taken to be received:

(a)   in the case of a posted letter, on the third (seventh, if posted to or from a place outside Australia) day after posting; and

(b)   in the case of a facsimile, on production of a transmission report by the machine from which the facsimile was sent which indicates that the facsimile was sent in its entirety to the facsimile number of the recipient notified for the purpose of this clause if prior to 5.00 pm on a business day or otherwise upon the next business day following such production.

26. COA12 did not contain details of the person for whose attention a notice must be specified. Nor were facsimile numbers provided. The address of each of the parties at the commencement of the deed is said to be “Level 24, AMP Building, 33 Alfred Street, Sydney, NSW” (the AMP address). As at 7 July 2023, AMPCFM was no longer at that address.

The Accession Deed or COA14

27. On 22 October 2014, the parties entered into a further deed to make provision for the transfer of ASCF’s 25% share in the Property to AMPCFM (the first 25% interest). In the Details section of COA14, AMPCFM in its capacity as responsible entity of the AMP Capital Diversified Property Fund is identified as the “Incoming Party” and ACPP is identified as the “Outgoing Party”. The “Continuing Parties” include Macquarie Retail and AMPCFM in its capacity as responsible entity of the AMP Capital Shopping Centre Fund. All of the parties to COA14 have the AMP address listed as their address in the “Details” section of that document. Again, no relevant person (to whose attention the notice ought be marked) was identified, nor was any facsimile number provided, for any party.

28. The Details section of COA14 also identified the following “Contracts”, each of which was dated 25 October 2012: COA12, a Management Agreement and Development Management Agreement. The parties to each of these agreements included the Co-Owners, that is, those with shares in the Property.

29. The recitals to COA14 (referred to as “Background”) state as follows:

A    The Outgoing Party, the Guarantor and the Continuing Parties are parties to the Co-owners Agreement.

B   The Outgoing Party, the Continuing Co-owners and the Manager are parties to the Management Agreement and Development Management Agreement.

C   The Outgoing Party has agreed to sell its interest in the Macquarie Centre to the Incoming Party.

D   Clause 6.3(b)(iii) of the Co-owners Agreement provides that “the party seeking to Deal with the whole or any part of its interest must...procure that the Permitted Transferee...executes and provides to the other Co-owners all documents reasonably required by the other Co-owners in favour of all relevant parties and in forms reasonably acceptable to such parties agreeing to be bound by the terms of this deed; the Management Agreement...; the Development Management Agreement...; and any other document to which the transferring Co-Owner is a party...”

E   Clause 15.1 of the Management Agreement and clause 29 of the Development Management Agreement provide that: “If a person proposes to become a Co-Owner after the date of this agreement the relevant Co-Owner who proposes to transfer the whole or any part of its Property Interest to such New Co-Owner shall first procure that the New Co-owner executes an agreement with the other parties to this agreement...whereby the New Co-Owner accedes to and becomes bound by the obligations applicable to a Co-Owner under this agreement and becomes entitled to the rights of a Co-Owner under this agreement, and vice versa.”

F   The parties have entered into this document in satisfaction of clause 6.3(b)(iii) of the Co-owners Agreement, clause 15.1 of the Management Agreement and clause 29 of the Development Management Agreement.

30. Clause 1 of COA14 provides:

1   Agreement

With effect on and from the Effective Date:

(a)   each of the parties to a Contract agree that the Contract is discharged and a new contract (New Contract) is created on the same terms and conditions as that Contract except that:

(i)   each reference to the Outgoing Party will be read as a reference to the Incoming Party; and

(ii)   notices to the Incoming Party must be provided using its details specified in this document; and

(iii)   any reference to the Guarantor is deleted; and

(iv)   in the New Contract created on the same terms as the Co-owners Agreement, the definition of “Beneficial Party” is amended by replacing the words “in respect of ACPP Retail, AMP Life and ACPP Holding” with “AMP Capital Funds Management Limited in its capacity as responsible entity of the AMP Capital Diversified Property Fund”;

(b)   the Incoming Party and each other party to a New Contract:

(i)   are bound by that New Contract; and

(ii)   enjoy under that New Contract all the rights and benefits conferred on those parties under that New Contract;

(c)   the Incoming Party does not have any of the obligations of the Outgoing Party under the Contract that arose before the Effective Date;

(d)   the Continuing Parties release the Outgoing Party and the Guarantor from any obligation under the Co-owners Agreement to be performed on or after the Effective Date; and vice versa; and

(e)   the Continuing Co-owners and the Manager release the Outgoing Party from any obligation under the Management Agreement and the Development Management Agreement to be performed on or after the Effective Date; and vice versa.

31. As set out above, cl 1(a) of COA14 provides that a new agreement was created on the “same terms” as COA12, subject to four exceptions, only one of which, cl 1(a)(ii), is relevant and its present relevance is confined to ground 7. The new post-COA14 agreement, thus created, will be referred to as the COA except where it is necessary to refer to COA12 or COA14.

The Management Agreements

32. Co-owners of the Property entered into agreements for the management of the shopping centre. The Management Agreement dated 25 October 2012 (to which Macquarie Retail, ACPP and ASCF were parties) conferred rights on the parties to appoint and oversee the centre’s day to day “Manager” through a Management Committee, the membership of which was proportional to each co-owner’s share in the Property (cl 2.5); make decisions for the centre and share in the revenue derived from the centre (cl 4.2(d)).

The relevant post-COA14 transactions

The transactions relating to Dexus Wholesale and AMPCFM in 2021 and 2022

33. In April 2021, the AMP Capital Diversified Property Fund (of which AMPCFM was the responsible entity) merged with the Dexus Wholesale Property Fund at which point Dexus Wholesale replaced AMPCFM as the responsible entity of the AMP Capital Diversified Property Fund.

34. The transfer of AMPCFM’s 25% share in the Property to Dexus Wholesale was registered on 13 October 2021. On 22 October 2021, Dexus Wholesale gave notice to AMPCFM under cll 8.1(a) and 9.2 of the COA that it wished to deal with its interest in the Property by selling its 25% share for $422.5 million (plus GST) on the terms in the contract for sale attached to the notice and offered AMPCFM the first right to acquire the interest on those terms. It also informed AMPCFM that AMPCFM had two months to notify Dexus Wholesale whether it intended to exercise its right and purchase the interest.

35. On 16 December 2021, AMPCFM sought Macquarie Retail’s consent to waive compliance with the date for exchanging the contract for purchase (as it fell within the Christmas shut-down period). That waiver was granted and, on 31 January 2022, Dexus Wholesale transferred its 25% of the Property to AMPCFM (the second 25% interest), with the consequence that each of Macquarie Retail and AMPCFM held a 50% interest in the Property from that date.

The sale by AMP Ltd of its shares in AMPCFM to Dexus Falcon

36. On 24 March 2023, having announced that it had agreed to sell its real estate and domestic infrastructure equity business to the Dexus group on 27 April 2022, AMP Ltd transferred all of its shares in AMPCFM to Dexus Falcon, an entity within the Dexus group. The result of this transfer was that Dexus Holdings became AMPCFM’s ultimate holding company and AMPCFM ceased to be an AMP Related Corporation. On 28 March 2023, Dexus Holdings gave notice of this to the Australian Securities and Investments Commission.

The ensuing dispute

37. Except where otherwise stated, Macquarie Retail (for whom Norton Rose Fulbright (NRF) acted) and AMPCFM (for whom Herbert Smith Freehills (HSF) acted) communicated through their solicitors by email from 24 March 2023.

Macquarie Retail’s notice dated 30 March 2023 enclosing a notice pursuant to cl 12.2 of the COA (the First Notice)

38. On 30 March 2023, NRF wrote to AMPCFM enclosing a notice (the First Notice) pursuant to cl 12.2 of the COA, which was copied to HSF, alleging that the acquisition of its shares by Dexus Falcon resulted in a deemed Prohibited Disposal and Default under the COA.

39. HSF responded on 31 March 2023, asking for an explanation of the First Notice, informing NRF that they had received the notice from AMPCFM but not yet from NRF, and, in those circumstances, requesting that future correspondence be emailed to four nominated email addresses of solicitors within the firm, including the two partners of the firm who signed the letter of that date.

Macquarie Retail’s notice dated 28 April 2023 enclosing a notice pursuant to cl 12.2 of the COA (the Second Notice)

40. On 28 April 2023, NRF wrote to HSF referring to their letter of 30 March 2023 and the First Notice. NRF, on behalf of Macquarie Retail, also purported to serve a further notice on AMPCFM by email to HSF, in accordance with HSF’s request in their letter of 31 March 2023. The further notice was entitled “Notice of Exercise of Rights under cl 12.2 of the Co-owners’ Agreement – Macquarie Centre, North Ryde dated 25 October 2012 as amended and restated from time to time (COA) (the Second Notice)”. The Second Notice also nominated Mr Paul Satara, valuer.

41. On 18 May 2023, HSF responded, complaining that NRF had not responded to their letter of 31 March 2023 “in any meaningful way”. They alleged that none of the transactions referred to in correspondence amounted to a “Prohibited Disposal”, whether deemed or otherwise, and that it would be necessary for Macquarie Retail to commence proceedings for specific performance “to seek to justify its position”. Further extracts from this letter are reproduced with the reasons with respect to ground 7.

42. On 26 May 2023, Macquarie Retail engaged Mr Satara as its valuer. AMPCFM did not join in the appointment of a valuer. On 23 June 2023, Mr Satara determined the market value of AMPCFM’s share of the Property to be $830 million (AMPCFM’s share being 50% of the total $1.660 billion).

Macquarie Retail’s notice dated 7 July 2023 pursuant to cl 12.11 of the COA (the Third Notice)

43. On 7 July 2023 at 5.31pm, NRF wrote to HSF enclosing a notice of purchase pursuant to cl 12.11 of the COA (the Third Notice). It also noted that a hard copy of the notice would be sent to AMPCFM by registered post pursuant to cll 12.11 and 13 of the COA. HSF forwarded the letter and Third Notice to AMPCFM at 5.40pm. The letter and notice were delivered by registered post at 9.45am on 18 July 2023. It was common ground that the letter delivered by post arrived outside the 10 business day period for which cl 12.11 provided.

44. The Third Notice said, of present relevance:

Pursuant to clause 12.11 of [the COA], [Macquarie Retail] now advises AMPCFM in writing that it wishes to purchase all of the Default Interest at a price equal to the Default Interest Value. Specifically, [Macquarie Retail] wishes to purchase AMPCFM’s 50% ownership interest in the subject property at the price of $830,000,000 (see the Valuer’s determination at 13.5).

An unconditional contract of sale for the Default Interest will be provided to AMPCFM within 10 business days of this Notice as required by clause 12.14 of the COA.

45. On 21 July 2023, NRF sent HSF an unconditional contract for the purchase of all of AMPCFM’s 50% interest in the Property for $830 million and arranged for a copy of the contract and covering letter to be delivered by hand to AMPCFM’s physical address that same day. AMPCFM refused either to sign the contract or to acknowledge the rights asserted by Macquarie Retail.

The proceedings in the Court below

46. By summons filed on 29 November 2023, Macquarie Retail sought the following relief against AMPCFM (the first defendant and first appellant) and Dexus Falcon (the second defendant and second appellant):

(1)   A declaration that the transfer of all the shares in Dexus Capital Funds Management Limited (formerly [AMPCFM]) to the Second Defendant on or about 24 March 2023 gave rise to a deemed Prohibited Disposal and/or Default pursuant to clauses 8.2 and 1.1 (definition of “Default”) of the Co-owners’ Agreement - Macquarie Centre, North Ryde dated 25 October 2012 read with the Accession Deed - Co-Owner Agreements - Macquarie Centre, North Ryde dated 22 October 2014 (2012 & 2014 COA).

(2)   An order that the First Defendant specifically perform and carry into execution a contract of sale in the form issued by the Plaintiff to the First Defendant on 21 July 2023 pursuant to clause 12.14 of the 2012 & 2014 COA (Contract of Sale).

(3)   An order that the First Defendant and/or Second Defendant do all things necessary on completion of the Contract of Sale to transfer to the Plaintiff legal title to, or ownership of, the First Defendant’s 50% share of the following property (the “Property” as defined in clause 1.1 of the 2012 & 2014 COA):

a.   the land in DP 3/1047085, 123-124/1130457 and 100/612281 (which now together comprise the land in DP 100/1190494);

b.   the improvements, fixtures, fittings, services, plant and equipment located in or on the Property and belonging to the First Defendant (itself or together with the Plaintiff); and

c.   any associated rights acquired under any contract for the purchase of any Property or any ancillary agreement.

(4)   An order that the First Defendant and/or Second Defendant be liable for and pay the costs of the CBRE Valuation Report dated 23 June 2023.

(5)   Interest on the amount payable under prayer 4.

(6)   Costs.

(7)   Such other and further relief the Court considers appropriate.

47. The primary judge granted specific performance on the following basis.

48. The primary judge found that:

1. the effect of COA14 was that the terms of COA12 continued to bind all the parties except the outgoing party (ACPP) after 22 October 2014 (J [77]-[79]);

2. when AMPCFM acquired the first 25% interest in the Property from ASCF on 31 May 2013 and when it acquired, from Dexus Wholesale, the second 25% interest in the Property on 31 January 2022, it did so “under clause 8.1”, within the meaning of cl 8.2 (J [73] and [83]);

3. when Dexus Falcon acquired all of AMP Ltd’s shares in AMPCFM, AMPCFM ceased to have the characteristics which qualified it as a member of its Relevant Co-Owner’s Group within the meaning of cl 8.2 (because it was no longer a Related Corporation) and thus was deemed to have carried out a Prohibited Disposal, was in Default and deemed under cl 8.2 to be a Defaulting Co-Owner (J [86]-[91]);

4. on 30 March 2023, Macquarie Retail gave notice of default to AMPCFM under cl 12.2 and on 28 April 2023 nominated a valuer, who, on 23 June 2023, determined the Net Proceeds of Sale and Default Interest Value (J [40], [44], [47]-[49]);

5. on 7 July 2023, Macquarie Retail gave notice to AMPCFM under cl 12.11 that it wished to purchase all of the Default Interest (J [50] and [109]); and

6. on 21 July 2023, Macquarie Retail delivered an unconditional contract to AMPCFM in accordance with cl 12.14 (J [54]) but the contract was not exchanged within the 10 business day time limit.

The grounds of appeal

49. In substance, the grounds of appeal reflect the arguments put by AMPCFM and rejected by the primary judge. It is convenient to address them in the way they have been grouped in the notice of appeal.

Alleged error in the finding relating to the first 25% interest acquired by AMPCFM (grounds 1 and 2)

50. AMPCFM alleged that the primary judge erred in finding that AMPCFM acquired the first 25% interest in the Property “under clause 8.1” within the meaning of those words in cl 8.2 of COA12 as incorporated into COA14: J [73]-[79] (ground 1). It alleged that the primary judge ought to have found that in order for there to have been a deemed Prohibited Disposal and Default under cl 8.2, the first 25% interest had to be acquired under the COA14 (that is, after the Effective Date of the COA14, 22 October 2012), whereas it had been acquired under COA12 (ground 2).

51. In support of ground 1, AMPCFM submitted that COA14 discharged COA12 and created a new agreement, which had the effect that any right or obligation on any party to COA12 which had not accrued by 22 October 2014 (the Effective Date of COA14) was discharged. Thus, it was argued that the reference in cl 8.2 (which was incorporated into the new agreement by cl 1(a) of COA14) to a Co-Owner which acquired an interest in the Property under cl 8.1, refers only to an acquisition which occurred after 22 October 2014.

52. On this basis, AMPCFM submitted in respect of the first 25% interest that AMPCFM acquired:

1. it was not an interest which AMPCFM acquired “under clause 8.1” as referred to in cl 8.2 (because it was acquired before 22 October 2014); and

2. the change in control of AMPCFM from AMP Ltd to Dexus Falcon on 24 March 2023 was thus not a breach of cl 8.2 and therefore not a Default.

53. The construction for which AMPCFM contended depended on cl 1(a) of COA14 being read as having the effect of beginning the new contract “on and from the Effective Date” as if nothing had occurred under COA12 or nothing that had occurred under COA12 was relevant or could affect the parties’ rights under COA14. Thus, while AMPCFM accepted that, had Dexus Falcon purchased its shares prior to 22 October 2014, cl 8.2 of COA12 would have had the effect of deeming AMPCFM to have carried out a “Prohibited Disposal and thereby be in Default” as a “Prohibited Co-Owner”, it contended that this consequence did not ensue because Dexus Falcon did not purchase the shares in AMPCFM until 24 March 2023.

54. I do not regard this construction as consistent with the words of cl 1(a) that provide that the new contract is to be “on the same terms and conditions as that contract [i.e. COA12]” (emphasis added) subject to exceptions which are not presently material. I reject the submission that the word “same” is not intended to encompass acquisitions that have occurred under COA12 and before the Effective Date of COA14.

55. Clause 8 turns on the characteristics of a party from whom an incoming Co-Owner has acquired its interest in the Property. Clause 8.2, in terms, looks back to identify whether a Co-Owner has acquired (that is, in the past) an interest in the Property under cl 8.1. Clauses 8.1 and 8.2 are not to be read down as if their application is limited to acquisitions post-22 October 2014. The requirement in cl 1(a) of COA14 that the new contract be on the same terms and conditions as COA12 can only be fulfilled if there is a continuation of the arrangements which were in place between the continuing parties prior to the Effective Date of COA14.

56. The construction for which AMPCFM contends assumes that COA14 should be treated as an independent agreement that operates in a way that takes no account of anything that went before. That is not correct. As the context and the text of cl 1(a) make clear, COA14 was intended to be a new contract that was created “on the same terms and conditions as [COA12]” except the four respects identified in sub-paras (i) to (iv). As is apparent from its recitals, COA14 was intended to give effect to cl 6.3(b)(iii) of COA12, which required a Permitted Transferee to execute all documents reasonably required to be bound by the terms of COA12 subject to “such adaptions and modifications as may be necessary in the circumstances”. Consequently, in context, the expression, “same terms and conditions” must be understood as referring not simply to the words of the previous contract but as a reference to the rights and obligations created by it. To the extent that those underlying rights and obligations existed by virtue of facts that existed before COA14 was entered into they continued, except that they became rights and obligations of the Incoming Party under the new contract and ceased to be rights and obligations of the Outgoing Party under the old one. They were not displaced by the new contract.

57. Clause 1(c) of COA14 adds some support to this conclusion. It states that “the Incoming Party does not have any of the obligations of the Outgoing Party under the Contract that arose before the Effective Date”. If AMPCFM’s construction of COA14 is correct, cl 1(c) is otiose because on that construction COA12 and COA14 are separate contracts giving rise to their own rights and obligations with the result that there were no rights and obligations “under the Contract” that could bind AMPCFM.

58. AMPCFM sought to attach some significance to the fact that cl 1(a) of COA14 specifically states that “the Contract” (that is, COA12) is discharged and that a new contract on the same terms and conditions (subject to the exceptions mentioned earlier) is created. That was in contrast to earlier accession deeds executed by the same parties which did not purport to terminate the earlier agreement but simply stated that on and from the Completion Date, the in-coming owner became bound by the original agreement. Little turns on this. The fact that different albeit overlapping parties chose at different times to adopt particular drafting to achieve a particular result does not mean that they intended to achieve different results by adopting different drafting. COA14 must be construed by reference to its text, context and purpose: Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (2015) 256 CLR 104; [2015] HCA 37 at [46]ff (French CJ, Nettle and Gordon JJ). It is not to be construed by reference to the fact that there may have been some other way of achieving the intended result that put the issue beyond doubt. As Lord Dunedin said in Charrington & Co Ltd v Wooder [1914] AC 71 at 82:

I do not think it rests with either party to say to the other, ‘If the meaning is as you contend, why did you not express it otherwise?’ Both contentions as to the true meaning can be expressed by a gloss … If either of the glosses had been expressed there would be no possibility of dispute. It therefore comes back to the question, What is the true interpretation of the expression in the contract?

59. Moreover, the construction for which AMPCFM contends does not take adequate account of the evident commercial purpose of the pre-emptive right provisions of COA12 and COA14. While authorities, such as Donau Pty Ltd v ASC AWD Shipbuilder Pty Ltd (2019) 101 NSWLR 679; [2019] NSWCA 185 at [58] (Bell P, Basten JA agreeing), have cautioned against judges purporting to assess the commercial purpose of a contract, this caution does not oblige the Court to disregard a purpose that is obvious from the terms of the contract.

60. The primary judge was correct to reject the construction for which AMPCFM contended. The evident purpose of cll 8.1 and 8.2 of the COA, when read in context, was to give the Co-Owners a pre-emptive right to control the identity of future Co-Owners by conferring on a Minority Co-Owner the first right to buy out an Outgoing Co-Owner and, in the event of that Co-Owner not wishing to exercise the right, a right on any remaining Co-Owner or Co-Owners to purchase the share in the Property of the Outgoing Co-Owner. The consideration in each case is, in effect, the full market value of the Outgoing Co-Owner’s share. The objective commercial purpose of such provisions, as reflected in their express terms, is to increase the prospect of the commercial objectives of each Co-Owner in owning and running the shopping centre being harmonious or, at least, reconcilable. Because the Outgoing Co-Owner has a right to full market value of its share in the Property, its interest in realising the full value of its share is accommodated by the provisions. The Incoming and Outgoing Co-Owners have the benefit of the provisions which increase the prospect of related corporations becoming Co-Owners.

61. Where an existing Co-Owner transfers its share to a Related Corporation, the process need not be gone through because the transaction is regarded as, in essence, an “in-house” transaction. However, where, as in the present case, a Co-Owner which has been a Related Corporation but, because of the acquisition of its shares by a non-Related Corporation, loses that status, the provisions which entitle other Co-Owners to buy that party’s share come into operation. This mechanism, for which COA12 made provision, was preserved by COA14: the only change was that ASCF ceased to be bound once its share in the Property was transferred to AMPCFM, whereupon AMPCFM itself became bound by the same provisions of COA12.

62. AMPCFM acquired the first 25% interest in the Property from ASCF “under clause 8.1” of COA12 as it was then a wholly owned subsidiary of AMP Ltd. However, it lost this status on 24 March 2023 when Dexus Falcon purchased all the shares in AMPCFM, thereby triggering the buyout provisions of COA14. Further, if the construction for which AMPCFM contended in support of grounds 1 and 2 were accepted, it would produce the anomalous result that the second 25% interest would have been acquired “under clause 8.1” (because its acquisition post-dated COA14) but the first would not have been (because its acquisition pre-dated COA14). Such a result would be inimical to the commercial purpose of giving Co-Owners pre-emptive rights to acquire the shares of outgoing Co-Owners.

63. Grounds 1 and 2 have not been made out.

Alleged error with respect to the second 25% interest (grounds 3 and 4)

64. AMPCFM alleged that the primary judge erred in finding that it acquired the second 25% interest in the Property “under clause 8.1” within the meaning of cl 8.2 of COA12 as incorporated into COA14 (J [81]-[85]) (ground 3) and that his Honour ought to have found that the second 25% interest was acquired under cll 9.2 to 9.7 of COA14 (ground 4).

65. AMPCFM submitted in respect of the second 25% interest that the acquisition was not effected “under clause 8.1” because that interest was offered directly to AMPCFM by the operation of cll 9.2 to 9.7.

66. While AMPCFM accepted that its right (as the Minority Co-Owner) to acquire the interest of an outgoing Minority Co-Owner (Dexus Wholesale) arose under cl 8.1(a)(i) of the COA, it contended that because the acquisition was effected pursuant to cll 9.2 to 9.7, it could not be said that it acquired the second 25% interest “under clause 8.1”.

67. Clause 8.1 applies where a Minority Co-Owner wishes to deal with the whole of its interest in the Property. It confers on the other Minority Co-Owner a priority first right to acquire that interest on the terms set out in cll 9.2 to 9.7. When AMPCFM acquired Dexus Wholesale’s 25% interest, it did so by reason of the priority first right of acquisition which was conferred on it by cl 8.1. The interest that was acquired in the exercise of that right was therefore acquired under that clause. Clause 8.1 also states how the right is to be exercised by reference to cll 9.2 to 9.7. However, that does not alter the fact that the right arises, and the interest is therefore acquired, under cl 8.1. That conclusion is reinforced by the fact that the interest could not have been acquired under cll 9.2 to 9.7 by anyone unless AMPCFM was first given the opportunity to acquire the interest in accordance with cl 8.1. When it exercised that right, it acquired the interest under that clause.

68. If the construction for which AMPCFM contended in support of grounds 3 and 4 were accepted, it would produce the anomalous result that the second 25% interest would not have been acquired “under clause 8.1” but the first 25% interest would have been. For the same reasons as given above, this would also be inimical to the evident commercial purpose of cll 8.1 and 8.2.

69. In these circumstances, AMPCFM’s acquisition was “under clause 8.1” within the meaning of cl 8.2, cl 8.1 being the source of its right. The primary judge was correct to so find. Grounds 3 and 4 have not been made out.

Alleged error with respect to the identification of the “Relevant Co-Owner’s Group” (ground 5)

70. AMPCFM alleged (ground 5) that the primary judge erred in:

1. finding that the “Relevant Co-Owner’s Group” was merely a shorthand reference to the Co-Owner’s Group of which the transferee was a member at the time it acquired its interest: J [89] (ground 5(a));

2. failing to find that the “Relevant Co-Owner’s Group” in cl 8.2 was a reference to the seller’s Co-Owner’s Group as defined in cl 8.1(b) (ground 5(b));

3. finding that AMPCFM ceased to have the characteristics which qualified it as a member of “that Relevant Co-Owner’s Group” within the meaning of cl 8.2 of COA14: J [86]-[91] (ground 5(c)); and

4. finding that AMPCFM was deemed to have carried out a Prohibited Disposal and thereby be in Default under cl 8.2 of COA14: J [86]-[91] (ground 5(d)).

71. AMPCFM’s submission has the following steps:

1. the expression “Relevant Co-Owner’s Group” must have the same meaning in cl 8.2 as it does in cl 8.1(b) (where it is defined);

2. in cl 8.1(b) the expression “Relevant Co-Owner’s Group” must mean a group of which both the cl 8.1 transferee and cl 8.1 transferor were part at the time of the cl 8.1 acquisition;

3. accordingly, in cl 8.2 the expression “Relevant Co-Owner’s Group” must mean a group of which both the then transferee and transferor were part at the time of the transfer;

4. in the present case, the relevant transfer was the transfer of the interest in the Property brought about by the transfer of the shares in AMPCFM from AMP Ltd to Dexus Falcon;

5. at the time of that transfer, Dexus Falcon was not in the AMP Group; and

6. consequently, they were not in the same Co-Owner’s Group, with the result that cl 8.2 had no application.

72. This argument rests on a misconstruction of the two clauses. The defined term “Relevant Co-Owner’s Group” is not ambulatory in the way contended for by AMPCFM. Rather, the expression “Relevant Co-Owner’s Group” when defined in cl 8.1(b) is defined by reference to a specific “Dealing”, with the result that once a permitted Dealing occurs in accordance with that clause the expression “Relevant Co-Owner’s Group” is defined in a way that denotes a specific group (in the case of the permitted acquisition in question, the AMP Group). The reference to “that Relevant Co-Owner’s Group” in cl 8.2 is a reference to the group denoted by the earlier use of the phrase. That is made clear by use of the word “that”. That is, “that Relevant Co-Owner’s Group” is a reference back to the Group identified in cl 8.1(b) in connection with the Dealing in question. When AMPCFM acquired the second 25% interest it was permitted to do so because it was a member of the AMP Group. When it was acquired by Dexus Falcon, it ceased to have that characteristic. Consequently, cl 8.2 was triggered.

73. Understood in this way, the expression “Relevant Co-Owner’s Group” has the same meaning in cll 8.1(b) and 8.2 because it denotes the same group in both clauses.

74. For these reasons, ground 5 has not been made out.

Alleged error with respect to the consequences of a Default in respect of one of the two interests (ground 6)

75. AMPCFM submitted that the primary judge erred in finding that, if there was a deemed Prohibited Disposal in respect of either the first 25% interest or the second 25% interest within the meaning of cl 8.2, but not both, then Macquarie Retail was entitled to acquire the whole of the interest in the Property held by AMPCFM: J [92]-[98] (ground 6(a)); and failing to find that the reference to the “interest in the Property” in the definition of “Default Interest” is a reference to the interest in respect of which there is a Default (ground 6(b)).

76. It is not necessary to address ground 6 because it does not arise, having regard to my view that none of grounds 1-5 has been made out. Thus, it is not the case that there was a Default only in relation to one of the two 25% shares.

Alleged errors in finding that the notices were valid and were validly given (ground 7)

77. AMPCFM submitted that the primary judge erred in:

1. finding that Macquarie Retail gave notice to AMPCFM in accordance with cll 12.11 and 13.1 of COA14 to purchase AMPCFM’s interest in the Property: J [100]-[109] (ground 7(a));

2. failing to find that cl 12.11 contains a strict requirement that, for a valid Notice, a Co-Owner must itself or by its servants or agents, give the relevant notice to the Defaulting Co-Owner (ground 7(b));

3. finding that there were no “Details” in COA14: J [102]-[104] (ground 7(c)); and

4. failing to find that COA14 imposed a strict requirement to give notice by whatever address was specified in the “Details” irrespective of whether the addressee then occupied premises at that address: cf J [107] (ground 7(d)).

78. AMPCFM argued that the questions of construction (what cl 12.11 requires for a notice to be validly given) and fact (did Macquarie Retail comply with the requirements) were discrete questions which needed to be addressed separately. As to the first question, it argued that because cl 12.11 enables a Co-Owner to give notice to a Defaulting Co-Owner, it was an essential provision and that, accordingly, a failure to comply with cl 12.11 had the result that the Third Notice (given by NRF to HSF by email on 7 July 2023) was of no effect. In support of this submission, AMPCFM relied on several authorities for the proposition that notice provisions were essential, including Tricontinental Corporation Ltd v HDFI Ltd (1990) 21 NSWLR 689 at 718B-G (Waddell AJA, Samuels JA agreeing, with further reasons at 705D-706B), Bond v Hongkong Bank of Australia Ltd (1991) 25 NSWLR 286 and Hagerty v Hills Central Pty Ltd [2018] NSWCA 200.

79. AMPCFM submitted on the question of construction that:

1. clause 12.11 required the notice to be given within 10 business days after the delivery of the determination of the Valuers by the Co-Owner to the Defaulting Co-Owner; and

2. clause 13 required the notice to be in writing and sent by post to the address of the addressee specified in the “Details” or if another addressee notifies another address, then that address.

80. As to the question of fact, AMPCFM submitted that:

1. the email sent to HSF did not comply with cl 12.11 because it was not given by the Co-Owner to the Defaulting Co-Owner and that the contractual requirement was not fulfilled by the notice actually being received by the Defaulting Co-Owner; and

2. the notice which was posted by the Co-Owner to it did not comply because it was outside the 10 business day period provided for in cl 12.11 (as referred to above, this matter was common ground).

81. As the primary judge noted at J [102], it was agreed that as at 7 July 2023, AMPCFM’s registered business address was Level 30, 50 Bridge Street, Sydney and that it did not have an address at the AMP address. The effect of AMPCFM’s submissions is that COA14 required notice to be given to it at an address with which it had no connection at the time the Third Notice was given and that a failure to give notice to it at that address rendered the notice invalid.

82. AMPCFM did not argue before the primary judge that COA14 imposed a strict requirement to give notice by posting or delivering it to an address which was not that of the addressee. On that basis and in that context, his Honour (correctly, in my view) observed that “such a construction would create commercial inconvenience to say the least and should be avoided” (J [107]). The primary judge continued:

The existence of the possibility that notice would have to be given, and given only, at an incorrect address is an indication that the address requirements are not strict formalities.

83. However, in this Court, AMPCFM argued that COA14 did impose such a strict requirement. Macquarie Retail did not object to AMPCFM’s change of position on the basis that there was no prejudice occasioned by it.

84. I do not accept the submission that the notice must be given “by” the Co-Owner and cannot be given by someone on the Co-Owner’s behalf. Clause 12.11 does not deal with notices generally but is limited to the giving of a notice by a Co-Owner of purchase to a Defaulting Party. The clause requires the notice (from the Co-Owner) to be given to the Defaulting Co-Owner.

85. Clause 13.1 (set out above) is a general provision regarding notices. It requires a notice to be delivered to the address of the addressee marked to the attention of the person identified by the addressee in the “Details” section. The “Details” section in COA14 (which was relevant to AMPCFM, as an Incoming Party, because of cl 1(a)(ii)) did not nominate any person to whose attention any notice was to be marked. Nor, as referred to above, did it provide facsimile numbers for the parties.

86. AMPCFM relied on cl 1.2(g) of COA12 (set out above) in support of its submission that “person” in COA12 (and, by extension, COA14) included “a body corporate”. It submitted that there was no omission from the “Details” section in COA14 since AMPCFM was nominated as a body corporate and its address, the AMP address, was included. Thus, it submitted that there was no reason why the notice provision could not be complied with in accordance with its terms or ought not be construed as an essential requirement.

87. I reject this submission. The definition of “person” in cl 1.2 of COA12 applies “unless the contrary intention appears”. The evident intention of cl 13.1(b) is to bring a notice served on a body corporate to the attention of a natural person who has been nominated by the body corporate as, presumably, suitable either to address the contents of the notice or to bring the notice to the attention of the appropriate person to deal with it. This objective would be defeated if a notice to a body corporate was marked to the attention of the body corporate itself. It follows that cl 13.1(b) did not apply at all and therefore could not have been an essential requirement.

88. Further, at the time at which COA12 and COA14 respectively were entered into, it can reasonably be inferred that the office address of any one or more of the parties might change during the currency of the agreement. The choice by the parties to specify the office address of the parties which was current at the time at which the agreement was entered into (rather than, as they might have done, specify the registered office, which can be ascertained from a company search conducted at the time at which notice is sought to be given), but which might change, tends to weigh against such a provision being essential. This is because it was within the reasonable contemplation of the parties that compliance (by sending the notice to an address which may no longer be the address of the addressee without any indication of the person to whose attention the notice should be marked) would not necessarily be effective to bring the relevant notice to the addressee’s attention.

89. Each of the decisions to which the Court was referred turns on its own facts and circumstances. Ultimately, as AMPCFM submitted, it is a question of construction whether a particular notice requirement is to be construed as essential, with the consequence that any non-compliance results in the invalidity of a notice, or otherwise, with the consequence that as long as a written notice is brought to the attention of the intended recipient within the time specified, it will be valid. The provisions referred to above, when read together, display such a cavalier approach on the part of the parties to the topic of notices in COA12 and COA14 as to displace the conclusion which might otherwise have been available that there was an objective intention that cl 12.11 or cl 13.1 would be essential such that any non-compliance would render a notice invalid.

90. For these reasons I am not persuaded that any aspect of ground 7 has been made out.

The notice of contention

91. As none of the grounds of appeal has been made out, it is not necessary to address the notice of contention. However, if there be any doubt about my conclusion with respect to ground 7, I should add that I would otherwise have found that paragraph 1 of the notice of contention had been made out. Paragraph 1 is in the following terms:

The Court ought to have held that the respondent gave valid notice to the first appellant in accordance with cll 12.11 and 13.1 of the Co-Owners’ Agreement dated 25 October 2012 as incorporated into the Accession Deed dated 22 October 2014 (together, 2012 & 2014 COA) by giving notice to the First Appellant’s solicitors (HSF), on the basis that:

a.    HSF had authority to accept notices on behalf of the first appellant (J[112]); and/or

b.    HSF’s letter to the Respondent’s solicitors (NRF) dated 31 March 2023 amounted to notification of another address for the purposes of cl 13.1(c) of the 2012 & 2014 COA (J[113).

92. As referred to above, on 31 March 2023, HSF sent an email to NRF asking for correspondence to AMPCFM to be sent to four email addresses of solicitors at HSF who were assigned to the matter.

93. On 28 April 2023, when NRF purported, in terms, to “serve” Macquarie Retail’s Second Notice pursuant to cl 12.2 of COA12 to AMPCFM to HSF, it specifically referred to HSF’s email of 31 March 2023, which contained the request that correspondence should be sent by email to the four named persons associated with HSF. HSF did not, in its response, raise any objection to service of that notice in that manner. Nor did HSF inform NRF that its direction applied only to receipt of correspondence and not to service of notices. The same pattern ensued with further correspondence, in that HSF and NRF were the conduits through whom communications between their clients passed. Neither party objected to this course.

94. Indeed, by 18 May 2023 proceedings were anticipated, as is evident from the following passage from HSF’s letter of that date:

Your client has failed to properly articulate or seek declaratory relief as to its asserted rights. It will not be able to persist with that position. The notice attached to the April letter is apparently a precursor to an attempt to exercise rights under clause 12.14 of the COA. Given our client’s dispute that there has been any “Prohibited Disposal” your client will have to commence specific performance proceedings to seek to justify its position. Any such proceedings will be defended on the basis that there has been no actual or deemed “Prohibited Disposal”.

Should your client pursue the process outlined in clause 12 of the COA and in due course deliver an unconditional contract of sale purporting to be in accordance with clause 12.14 of the COA, it is our client’s intention that it will not sign a contract of sale and it will defend any proceedings which may be commenced seeking to compel it to do so.

(Emphasis added.)

95. It is generally appropriate, in such circumstances, that parties communicate through their solicitors, as in my view it was in the present case, particularly having regard to the stance which HSF had taken previously.

96. For these reasons, I consider that HSF had authority to receive notices on behalf of AMPCFM and regard HSF’s email to NRF of 31 March 2023 as amounting to notification of another address for the purposes of cl 13.1(c) of the COA. Thus, the notice was validly served and received.

97. I note that Macquarie Retail did not press its cross-appeal.

Proposed orders

98. For the reasons given above, I propose the following orders:

1. Dismiss the appeal.

2. Note the cross-appeal is not pressed and dismiss the cross-appeal.

3. Order the appellants to pay the respondent’s costs.

99. BALL JA: I agree with Adamson JA.

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Decision last updated: 11 April 2025