Moraitis Fresh Packaging (NSW) Pty Ltd v Fresh Express (Australia) Pty Ltd

Moraitis Fresh Packaging (NSW) Pty Ltd (the plaintiff) brought proceedings against Fresh Express (Australia) Pty Ltd (the defendant) concerning a right of first refusal to occupy stands at Sydney Markets. The dispute centred on the interpretation and enforceability of a deed granting this right, which was established in 1996. The plaintiff sought to exercise this right, but disagreements arose regarding the terms of the offer and the validity of the right itself under subsequent legislative changes. The matter was heard in the Court of Appeal of New South Wales.

The primary legal issues before the Court of Appeal were whether the right of first refusal was void due to statutory prohibitions on assignment, ineffective because the right to occupy the stands was not assignable, or rendered inoperative by a new legislative regime that created a present right to occupy the stands. Further questions arose concerning the consideration for a purchase under the right of first refusal: whether it was a fixed stated amount or the price offered by another purchaser, and if the former, whether it constituted an unlawful restraint upon alienation. The court also considered whether the plaintiff could raise these arguments on appeal and the proper construction of the deed, including whether a deemed offer was made and accepted, and whether the deed should be construed or corrected to avoid an absurd or uncommercial result.

The majority of the Court of Appeal (Giles JA and Hodgson JA, with Ipp JA dissenting) dismissed the plaintiff's appeal. The court held that the right of first refusal was not void or ineffective. Crucially, the majority construed the deed to mean that the consideration for exercising the right of first refusal was the price at which the stands would otherwise be sold to another buyer, not a pre-determined amount. This interpretation avoided the issue of the right being an unlawful restraint on alienation. The court found that the plaintiff's claim should be dismissed and declared that "the amount" referred to in the deed meant the price at which the stands would be sold to another buyer. The plaintiff was ordered to pay a significant portion of the costs.