Rasch Nominees Pty Ltd v Bartholomaeus

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Civil)

RASCH NOMINEES PTY LTD & ANOR v BARTHOLOMAEUS & ORS

[2012] SASC 70

Judgment of The Honourable Justice Kourakis

30 April 2012

CONVEYANCING - THE CONTRACT AND CONDITIONS OF SALE - GENERALLY - CONDITIONS PRECEDENT AND SUBSEQUENT

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH - CONDITIONS

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH - REPUDIATION AND NON-PERFORMANCE

The first and second defendants, the Bartholomaeus’, were owners of three adjacent parcels of land at Mount Barker (the property) – the third defendant, MBP, was the lessee of two of the parcels of land – the third parcel was leased to an independent entity – under MBP’s lease agreement MBP had a ‘right of pre-emption’ over the Leased Premises subject to certain conditions – on 31 October 2005 the Bartholomaeus’ entered a contract for sale over the entire property with the first plaintiff, Rasch (the Rasch contract) – the principal of MBP, Mr Hone (fifth defendant), objected to the sale to Rasch on the basis that the Leased Premises had not been offered to it on terms no more onerous than those offered to Rasch and lodged a caveat over the property to protect MBP’s ‘right of pre-emption’ under the Lease – the Bartholomaeus’ subsequently offered the Leased Premises for sale to MBP – MBP accepted the offer (the MBP contract) - settlement on the MBP contract was effected before the date of settlement on the Rasch contract and the land was transferred to MBP and to the fourth defendant, Jondam – Rasch commenced proceedings seeking to have the transfer set aside and orders for specific performance of the Rasch contract.

Whether the Rasch contract was subject to MBP’s pre-emption right under the Lease – whether MBP was given an opportunity to exercise its right of pre-emption in accordance with the lease agreement and whether, in any event, MBP’s conduct had disentitled it from this benefit – whether MBP held a legal or equitable interest in the Leased Premises prior to the signing of the Rasch contract – whether any relevant misrepresentations were made to Rasch – whether MBP relevantly participated in any acts of the alleged misrepresentations and breach of equitable duty of the Bartholomaeus’ – whether an order for specific performance lies - whether the consent dismissal of the claim against the Bartholomaeus' solicitor precluded Rasch's action against MBP - whether the Bartholomaeus' were negligently advised by their solicitors to make the pre-emption offer to MBP.

Held: The Rasch contract was subject to MBP’s Lease but not the pre-emption right – the Bartholomaeus’ failed to offer the Leased Premises for sale to MBP on terms no more onerous than the terms which were offered to Rasch -  however, as MBP was in breach of the maintenance provisions of the Lease at the time the Rasch contract was entered it was not entitled to enjoy the benefit of its right…