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

Dexus Capital Funds Management Ltd (as trustee for Dexus Wholesale Property Fund) and others (appellants) appealed to the Court of Appeal of New South Wales against a decision concerning two Co-owner Agreements (COAs) governing the relationship between co-owners of a shopping centre. The dispute centred on whether certain transactions involving a co-owner's ownership interest constituted prohibited disposals that triggered pre-emption rights under the COAs, entitling the non-defaulting co-owners to purchase that interest.

The Court of Appeal was required to determine whether two separate transactions, which effected a transfer of ownership interests, were prohibited disposals under the COAs. Further, the Court had to consider whether the second COA had an effect beyond merely substituting an outgoing co-owner with an incoming one, and whether the ownership interest was acquired "under" the clauses regulating dealings and establishing pre-emption rights. Finally, the Court considered whether certain service provisions should be construed as essential.

The Court of Appeal reasoned that the transactions in question did not trigger the pre-emption rights. It found that the second COA did not have a greater effect than to substitute an outgoing co-owner with an incoming one, and that the ownership interest was not acquired "under" the relevant clauses. The Court also determined that the service provisions were not essential.

Consequently, the Court of Appeal dismissed the appeal and the cross-appeal, ordering the appellants to pay the respondent's costs.