Macquarie Retail Pty Ltd v Dexus Capital Funds Management Ltd

This dispute concerns the construction and operation of two commercial contracts which govern the relationship between co-owners of the Macquarie Shopping Centre (the Property), Sydney’s largest suburban shopping centre. It is situated in the city of North Ryde, which lies to the northwest of the Sydney CBD.

As at 25 October 2012, the Property was co-owned by the following three entities within the Australian Mutual Provident Society (AMP) group, as tenants-in-common:

The ultimate holding company of the AMP group was AMP Ltd, an Australian Securities Exchange (ASX) listed company.

On 25 October 2012, the three co-owner entities, together with a number of other entities in the AMP group, entered into, by way of deed, a written Co-owners’ Agreement (the Agreement). Simultaneously with the Agreement, the parties entered into a Development Agreement and a Management Agreement, all intended to work congruently. The other agreements play no role in the resolution of this dispute.

The Agreement contains pre-emptive rights clauses and provisions affecting certain disposals of shareholdings or voting rights in a Co-Owner. Breaches of various terms of the Agreement constitute a Default which enlivens machinery for the valuation of the defaulting party’s interest in the Property and an entitlement in the non-defaulting Co-Owners to purchase the defaulter’s interest.

It is no doubt a matter of significant, even vital, interest to a co-owner of real property who is or is to become their co-owners. In a commercial context such as this, where the co-ownership is of a major commercial enterprise, that interest is acute. Arrangements which govern the relationship between Co-Owners in this case, must be seen in that light. It is also a relevant feature of these arrangements that a compulsory acquisition is at full market value.

On 31 May 2013, ASCF retired as responsible entity of the AMP Capital Shopping Centre Fund and was replaced by AMP Capital Funds Management Ltd (AMPCFM), a wholly-owned subsidiary of AMP Ltd. The Property was then held as tenants-in-common, by:

On 22 October 2014, the parties to the Agreement and AMPCFM entered into an Accession Deed (the Accession Deed) by means of which ACPP (or the Outgoing Party) was replaced by AMPCFM (as responsible entity of the AMP Capital Diversity Property Fund), as a party to the Co-Owner contractual arrangements. The Property was then held as tenants-in-common, by:

On 27 April 2022, AMP Ltd announced the sale of its real estate and domestic infrastructure equity business to the Dexus group, a large real estate group which manages a significant property portfolio. The ultimate holding company of the group is Dexus Funds Management Ltd, an ASX-listed entity.

On 24 March 2023, AMP Ltd transferred all of its shares in AMPCFM to a company within the Dexus group, whereupon AMPCFM ceased to be part of the AMP group and a Related Corporation of the companies in the AMP group. AMPCFM was renamed Dexus Capital Funds Management Ltd. I shall, however, refer to it as AMPCFM.

Macquarie Retail contends that the transfer constituted a Default, was prohibited, and triggered Macquarie Retail’s entitlement to buy AMPCFM’s interest in the Property.

The Agreement is a document of considerable length, and its provisions are complex. The Accession Deed is a brief document but how, juridically, it interacts with the Agreement involves a degree of complexity. As will be seen, each instrument is not without its imperfections and infelicities.

For the convenience of the reader, I will endeavour to give a brief summary of how the central and presently pertinent clauses of the Agreement operate. The full text of those clauses is in Schedule A to this judgment. All relevant parts of the Accession Deed are in Schedule B. This summary is not a substitute for an examination of the provisions themselves.

Clause 2.1 provides that the Agreement commences on its date and will terminate, relevantly, on the date a new deed is entered into, with the consent of the parties, in lieu of it. Clause 2.2 provides that the termination of the Agreement for any reason whatsoever will not affect the accrued rights and obligations of the parties at the time of termination.

Clause 6 provides that no Dealing (a widely defined term) 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 (which Macquarie Retail says is this case); or with the prior written consent of the other Co-Owners.

Clause 8.1(a) contains provisions giving a priority first right to a Minority Co-Owner (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. Except where the transferee is a specified (effectively in-house) acquirer (see cl 8.1(a)(i)), the Minority Co-Owner wishing to deal with their interest must offer it to the other Minority Co-Owner. If the offeree does not take up the offer, the Minority Co-Owner wishing to sell must offer the interest to the other Co-Owners.

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 a member of that Co-Owner’s Co-Owner’s Group (defined as Relevant Co-Owner’s Group) (that is, effectively, Related Corporations [2] ).

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.

Because of their centrality to this dispute (although set out in Schedule A) and for ease of understanding, I will set out the relevant parts of these clauses here:

Under cl 12, if a Default occurs, each Co-Owner must give written notice of it 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 desires to exercise its rights under cl 12, nominating an independent valuer. It must 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, meaning 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 (ie 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. Within ten 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.

Once again, for ease of understanding, I will set out cl 12.11 here:

Under cl 12.14, within ten business days of giving notice that it wishes to purchase, the Acquiring Co-Owner must 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 ten 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.

Clause 13 is headed Notices. Because of its centrality, I will set it out here:

There is no “Details” section in the Agreement. No person for whose attention the notice must be made is specified. No facsimile number is specified. Where, at the beginning of the Agreement, the parties are identified, each is stated to be located at Level 24, AMP Building, 33 Alfred Street, Sydney NSW. But it is agreed that AMPCFM did not have that address as at 7 July 2023. No submission was put that notice was required (exclusively or otherwise) to be given at that address.

In April 2021, the AMP Capital Diversified Property Fund (of which AMPCFM was the responsible entity) merged with the Dexus Wholesale Property Fund and an entity styled Dexus Wholesale Property Ltd (Dexus Wholesale) became the responsible entity of the AMP Capital Diversified Property Fund, assuming the rights and obligations of AMPCFM as responsible entity.

The relevant part of the Accession Deed is cl 1, which provides:

In the Details specified in the Accession Deed, AMPCFM is identified as the Incoming Party, with the address Level 24, AMP Building, 33 Alfred Street, Sydney NSW 2000.

Transfer of the 25% share previously held by AMPCFM to Dexus Wholesale was registered on 13 October 2021. This resulted in the ownership of the Property being held as tenants-in-common by:

By all accounts, because of s 601FS of the Act, [3] the obligations of AMPCFM as responsible entity devolved upon Dexus Wholesale. The evidence did not reveal whether Dexus executed any instrument binding it to the Agreement.

On 22 October 2021, Dexus Wholesale gave notice to AMPCFM under cll 8.1(a) and 9.2 of the Agreement that:

On 16 December 2021, AMPCFM wrote to Macquarie Retail:

Macquarie Retail acceded to AMPCFM’s request to waive non-compliance with the date for exchange of contract.

On 31 January 2022, Dexus Wholesale transferred its 25% of the Property to AMPCFM. This resulted in ownership of the Property being held as tenants-in-common by:

On 27 April 2022, AMP Ltd announced that it had agreed to sell its real estate and domestic infrastructure equity business to the Dexus group.

On 24 March 2023, AMP Ltd transferred all of its shares in AMPCFM to Dexus Falcon Pty, an entity within the Dexus group (and the second defendant), with the consequence that the ultimate holding company of AMPCFM became Dexus Holdings and AMPCFM ceased to be a Related Corporation of AMP Ltd or the group of companies controlled by it.

On 20 March 2023, Dexus announced that it and AMP had agreed binding documentation for the acquisition of AMP’s real estate and domestic infrastructure equity business.

On 24 March 2023, Macquarie Retail’s solicitors (NRF) wrote to AMPCFM seeking information “in order for Macquarie Retail to understand and exercise their rights under the Agreement”.

On 28 March 2023, Dexus Holdings gave notice to the Australian Securities Investments Commission that it had become the ultimate holding company of AMPCFM.

The following communications between the parties or their solicitors were, unless otherwise stated, by email.

On 30 March 2023, NRF wrote to AMPCFM enclosing a document entitled ‘First Notice’ (First Notice) stating that the acquisition by Dexus of AMP’s business earlier described resulted in a deemed Prohibited Disposal and Default under the Agreement. The covering letter informed AMPCFM that a copy of the letter and First Notice had been sent to AMPCFM’s solicitors (HSF).

On 31 March 2023, HSF wrote to NRF:

From this point on (with the one exception referred to later), all communications between the parties were via their respective solicitors.

After a further exchange of correspondence, on 28 April 2023, NRF wrote to HSF:

The letter enclosed a document of the same date headed ‘Notice of Exercise of Rights under clause 12.2 of the Co-owners’ Agreement – Macquarie Centre, North Ryde dated 25 October 2012 as amended and restated from time to time (COA) (Second Notice)’ (Second Notice) and gave notice of Macquarie Retail’s nomination of a valuer, Mr Paul Satara.

On 18 May 2023, HSF wrote to NRF taking issue with a number of matters which it is not necessary to canvass here. Pertinent things which the letter did say, however, were:

A further brief exchange of correspondence then occurred which it is not necessary to recount.

On 26 May 2023, Macquarie Retail engaged Mr Satara.

AMPCFM did not join in the appointment of the valuer.

On 23 June 2023, Mr Satara determined the Net Proceeds of Sale (ie the market value) of the Property as $1,660,000,000.

On 7 July 2023 at 5:31pm, NRF wrote to HSF enclosing a notice of purchase pursuant to cl 12.11 of the Agreement (Third Notice). The covering letter stated:

The Third Notice relevantly provided:

The letter and Third Notice were forwarded by HSF to AMPCFM at 5:40pm.

On 7 July 2023, a copy of the Third Notice was sent by registered post to AMPCFM at Level 30, 50 Bridge Street, Sydney NSW 2000, AMPCFM’s actual physical address. Australia Post records prove that it was delivered at 9:45am on 18 July 2023 (that is, well outside the time limit in cl 12.11).

On 21 July 2023, NRF sent HSF an unconditional contract for the purchase of all of AMPCFM’s 50% interest in the Property for $830,000,000. A copy of the contract and covering letter were hand-delivered to AMPCFM’s physical address that same day.

These proceedings started on 29 November 2023 when Macquarie Retail sued out of the Court a Summons and accompanying Commercial List Statement, claiming:

AMPCFM is cited as first defendant and Dexus Falcon as second defendant. The true protagonists, however, are Macquarie Retail and AMPCFM (now owned by the Dexus group). Where the context requires, references to AMPCFM should be construed as including Dexus Falcon.

The hearing was set down to commence on 21 October 2024 for three days. It was completed in just under two.

The Court had the benefit of comprehensive written and oral submissions. I have taken account of all the arguments but will not restate them.

The parties helpfully provided a Statement of Agreed Facts.

Macquarie Retail puts the following principal propositions:

AMPCFM puts the following principal propositions in response:

AMPCFM did not press an untenable submission that notice was not given in time because the email communications were out of time because a business day ends at 5:00pm and they were sent and received after 5:00pm on the last day for notice. Such a construction of business day was rejected by Barrett J in Mohamed v Farah [2004] NSWSC 482 at [53]. It is also to be observed that cl 13.3(b) takes a facsimile to be received if it was sent in its entirety to the specified facsimile number prior to 5:00pm on a particular business day. That presumption does not apply to an email communication which, unlike a facsimile, does not need to be printed out to be seen.

As to AMPCFM’s argument that the acquisition of the first 25% was not acquired under cl 8.1, Macquarie Retail argues that its entitlement to the priority right and AMPCFM’s obligation in cl 8.1, read with cl 8.2, are rights and obligations which had accrued at the time of termination of the Agreement within cl 2.2. The basis for this argument is that AMPCFM’s obligation (and the corresponding right on the part of other Minority Co-Owners) to acquire the first 25% was, in effect, attached to that interest irrespective of when a relevant Default occurred and hence, those rights and obligations had accrued at the moment the first 25% was acquired.

As to the argument that AMPCFM was not a member of that Relevant Co-Owner’s Group within cl 8.2 (because it was not a member of the Dexus group), Macquarie argues that the reference in cl 8.2 to that Relevant Co-Owner’s Group is a reference to the Co-Owner’s Group of which the Co-Owner the subject of the change in characteristics was member, that is, if a Co-Owner which acquired an interest in the Property under cl 8.1 ceases to be a member of the Co-Owner’s Group to which it belonged at the time of the acquisition (irrespective from whom it acquired the interest) cl 8.2 applies.

As to the argument that, on a Prohibited Disposal, the only interest which the Acquiring Co-Owner can acquire is a specific interest the subject of a Default, Macquarie Retail draws attention to the definition of Default Interest which it argues has the consequence that, on a Default, the entirety of the interest of the Defaulting Co-Owner is in play. It also draws attention to the fact that a Default, as defined, may consist of a breach of an obligation of good faith (cl 24) or the failure to meet an indemnity (cl 27) which need not bear a relationship to any particular interest.

As to the argument that the Court cannot grant relief in relation to only one 25% interest, it seeks to rely on the words in cl 12.14 that it “may take action to enforce its rights by seeking an order for specific performance of its rights” under cl 12 and argues that the Court can grant relief in respect of whatever its rights turn out to be. It relies, with respect to the argument that it has not pleaded such a claim, on the prayer in the Summons for “other and further relief the Court considers appropriate”. Finally, it argues that the Court can grant this relief under s 90 of the Civil Procedure Act 2005 (NSW). [4]

On AMPCFM’s arguments on notice, Macquarie Retail puts that:

AMPCFM argues that neither HSF’s letter dated 31 March 2023 nor its letter dated 18 May 2023 conveyed that AMPCFM was dispensing with any formal requirement for giving of notice under the Accession Deed. It puts that the 31 March 2023 letter referred to correspondence being emailed, not notice being given.

It argues that Macquarie Retail has not established an evidentiary basis for its claimed estoppel. It has not proved reliance out of the mouth of its guiding minds.

Before dealing with the arguments, it is apt to state briefly the principles which apply to the construction of the Agreement and the Accession Deed. They are both commercial contracts which are to be given a business-like interpretation. Interpreting them requires attention to the language used by the parties, the commercial circumstances which they address, and the objects which they are intended to secure. The meaning of the words chosen is determined objectively by reference to their text, context, and purpose, the question being what a reasonable businessperson would have understood them to mean. Preference is given to a construction supplying a congruent operation to the various components of the whole, so as to avoid commercial inconvenience. Where language is open to more than one construction, the Court will prefer a construction which avoids consequences which are capricious, unreasonable, inconvenient or unjust. [5]

I will endeavour to deal with the issues (including answers and replies) to which the arguments (as I understand them) recounted above give rise, in the sequence in which they are set out above.

The following two questions, both of contractual construction, arise:

I have concluded that the first 25% was acquired under cl 8.1 as incorporated into the Accession Deed. The second question therefore does not arise, but I will still answer it. I have concluded that there had not been an accrual of any right or obligation under cl 12 by 22 October 2014 in relation to the first 25%.

The effect of AMPCFM’s submission on the first question, if accepted, would be that AMPCFM received the benefit of the entitlement to take an interest in the Property from another Minority Co-Owner because it was a member of that Relevant Co-Owner’s Group, but without the burden of having to offer to sell it if it ceased to be a member of that Relevant Co-Owner’s Group as contemplated by cl 8.2. AMPCFM’s construction has the effect that any acquisition under cl 8.1 prior to 22 October 2014 is to be disregarded for the purposes of cl 8.2, and Minority Co-Owners have no priority in relation to such an interest.

A commercial object which cl 8.2 is intended to secure is that the interest does not (without consequence) come to be held by a person who was a member of a Co-Owner’s Group (the existence of which was the factor entitling the transfer in the first place) and then ceases to be such. The construction contended for by AMPCFM would defeat, rather than serve, this object.

Such a result would also be inimical to Recital C in the Background section of the Agreement (which is incorporated into the Accession Deed) that each party is entitled to certain of the benefits enjoyed by, and subject to certain of the obligations of, the parties to it.

More important, indeed decisive, is that the construction contended for is contrary to the words of the Accession Deed. Clause 1(A) of the Accession Deed brings into existence a New Contract on the same terms and conditions as the Agreement. Clause 8.1 itself (and where it is referred to in cl 8.2) are as much terms of the Accession Deed as they were of the Agreement.

Clause 1.2(a) of the Agreement provides:

Applying this by way of incorporation into the Accession Deed, if one otherwise would construe the reference to cl 8.1 in cl 8.2 only to the Agreement, cl 1.2(a) deems that reference to be a reference to the Agreement’s successor, namely, the Accession Deed.

As to the second question, in my view, where cl 2.2 refers to accrued rights and obligations, it has in mind rights or obligations ripe to be vindicated by the grant of relief. That is not this case. No Default triggering cl 12 had occurred and there was no accrued right or obligation presently in existence at the time of the Accession Deed.

The answer to this question involves the proper construction of the term “under” where it precedes the words “clause 8.1” in cl 8.2.

In Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd (2000) 201 CLR 520 at [49], the High Court (Gleeson CJ, Gaudron, McHugh and Hayne JJ) said that the contract “under” which something occurs is to be identified by determining whether it is “properly to be seen as the source of the obligation” to do that thing. [6]

I reject AMPCFM’s argument that the second 25% was not acquired under cl 8.1 because it was acquired, rather, under cll 9.2 to 9.7.

Clause 8.1(a)(i) is the source of the obligation to give the priority first right to acquire. That acquisition is on the terms set out in cll 9.2 to 9.7. It follows that the acquisition of the second 25% was under cl 8.1.

I interpolate that the circumstances by which Dexus came to own the second 25% were not elucidated at the trial.

It is not in issue that when the second 25% was acquired by AMPCFM, it and Dexus were not members of the same Co-Owner’s Group. As I have said, the evidence does not elucidate how Dexus came to have the second 25% in the first place or how cl 8.1(b) was or could have been the basis for that transfer. In fact, it could not have been. This does not matter because the interest was acquired by AMPCFM under cl 8.1(a) (within the meaning of cl 8.2), Dexus being a Minority Co-Owner wishing to deal with the whole of its interest.

The thrust of AMPCFM’s submission is that “that Relevant Co-Owner’s Group” means, and means only, a Co-Owner’s Group to which the transferor and transferee belonged at the time of the Dealing whereby the transferee acquired an interest pursuant to the permission given in cl 8.1(b). In other words, it does not mean the Co-Owner’s Group to which AMPCFM belonged when Dexus acquired control of it.

A corollary of AMPCFM’s submission is that cl 8.2 only applies to an acquisition under cl 8.1(b). This cannot be correct because cl 8.2 refers to an interest acquired under the whole of cl 8.1, not one acquired under only cl 8.1(b).

The definition of “Relevant Co-Owner’s Group” is merely a shorthand reference to the Co-Owner’s Group of which the transferee was a member at the time it acquired its interest. Where that definition is used in cl 8.1(b), it is used in the context of defining the ambit of the permissible Dealing. Where it is used in cl 8.2, it is used to define the Co-Owner’s Group of which a transferee under cl 8.1 ceases to be a member. This conclusion is supported by the definition of Default which refers to “a breach of clause […] 8.2 (Ceasing to be a member of a Co-Owner’s Group)” (emphasis added) and cl 1.2 which provides that the singular includes the plural and vice versa.

I interpolate that, if my earlier conclusion that the first 25% was acquired under cl 8.1 is correct, in the end result, it would not matter that the second 25% was not acquired under cl 8.1 as referred to in cl 8.2, because the change in control of AMPCFM was a Prohibited Disposal in relation to the first 25% which, for the reasons referred to below, affects both interests.

I record that AMPCFM addressed an unsustainable argument (which it did not develop) that “Relevant Co-Owner’s Group” is a reference to the Co-Owner’s Group of which Dexus was part. This construction would have the effect that a Default is only triggered when the transferor’s Co-Owner’s Group status changes. Leaving aside that this construction does not sit with the words of the clause, it does not reflect any rational or logical commercial justification. By then, the interest has passed and a change in the transferor’s status as a member of a Co-Owner’s Group is commercially irrelevant.

AMPCFM’s submission that a Default by AMPCFM ceasing to be a member of a Co-Owner’s Group does not affect the entirety of AMPCFM’s interest in the Property, but only some part of it, has insuperable difficulties.

The basis of the submission is that the reference in cl 12.14 to “specific performance in respect of the particular Default” (emphasis added) bears a necessary relationship to the acquisition of an identified interest in the Property. However, the particular Default here is not one in connection with the acquisition of either the first 25% or the second 25%. It is AMPCFM ceasing to be a member of a Co-Owner’s Group. This affects Macquarie Retail’s position as much with respect to the first 25% as it does with respect to the second 25%. If correct, the outcome would be that Macquarie Retail would remain in co-ownership with a now differently controlled AMPCFM without the operation of the pre-emptive rights provisions, which outcome is, in my view, inimical to an object which the Accession Deed seeks to secure.

Once again, and decisive, in my opinion, is that the construction contended for is at odds with the words chosen by the parties. Default Interest is defined to mean the interest in the Property held by the Defaulting Co-Owner, not some part of it. Indeed, cl 12.11 gives the Acquiring Co-Owner the option to buy all or part of the Default Interest.

The effect of a Co-Owner carrying out a Prohibited Disposal and thereby being in Default under the Agreement is to make that Co-Owner a Defaulting Co-Owner and expose it to the risk of being bought out. The whole of the Defaulting Co-Owner’s interest is in play when it commits a Prohibited Disposal.

A Prohibited Disposal is but one of a number of Defaults which can give rise to an acquisition under cl 12. These include a breach of good faith, and a default in meeting indemnities, neither of which necessarily relates to a particular property interest.

The reference in cl 12.14 to the Acquiring Co-Owner’s entitlement to enforce its rights “by seeking an order for specific performance of its rights under this clause 12 in respect of the particular Default” (emphasis added) pertains to the Default. A Co-Owner may commit more than one Default and so give (or receive) more than one Default Notice: see cl 12.3.

A final consideration weighing against AMPCFM’s construction is that the words of limitation relied on by it apply only to the remedy of specific performance in respect of the particular Default, and not to some other remedy such as damages. The implication is that, where specific performance is concerned, the Default must be related to a particular interest in the Property, but where, for example, damages are concerned, this is not the case. There is no commercially logical or rational basis for such a distinction.

I reject Macquarie Retail’s submission that, if the Court were to find that the Default related to only one (but not both) 25% interests and relief would otherwise be available in relation to that interest, the Court could and should grant it. I uphold AMPCFM’s submission on this point. Leaving aside that such relief was not claimed, Macquarie Retail’s right under cl 12.11 is to give notice of its wish to purchase all or part of the Default Interest, and its obligation under cl 12.14 is to deliver the contract it wishes to have exchanged. It gave notice only of an intention to purchase all of AMPCFM’s interest in the Property and submitted a contract on that basis. Under cl 12.14, its entitlement is to seek specific performance of that contract, not some other contract. Section 90 of the Civil Procedure Act 2005 (NSW) does not save this situation because the order sought is not appropriate to be made.

Clause 12.11 itself entitles a Co-Owner to give notice to the Defaulting Co-Owner that it wishes to purchase. The clause does not itself impose any formalities or ceremony, let alone any strict requirements, for the giving of notice.

If any strict requirements apply, they must derive from cl 13 which requires notice to be in writing, to be marked for the attention of a person specified in the Details and left or posted to an address specified in the Details, or sent by facsimile to the facsimile number specified in the Details. Clause 13.1(c) makes provision for the addressee to notify another address.

But there are no Details in the Agreement. Clause 1(A)(ii) of the Accession Deed provides that notices to the Incoming Party (AMPCFM) must be provided using its details specified in the Accession Deed which identifies the physical address as Level 24, AMP Building, 33 Alfred Street, Sydney NSW 2000. However, agreed facts are that:

The requirements in cl 13.1(c) for notices to be left at or sent to a particular address or sent by facsimile both presuppose an address specified in the Details. Given that there are no Details, cl 13.1(c) has no field of operation (except perhaps in the case of the addressee notifying a different address). Neither does cl 13.1(b) have any field of operation. The only formal requirement for notice which remains is that it be in writing. It is not in issue that an email communication is writing.

Importantly, cl 13.2 provides that, unless a later time is specified in it, a notice takes effect from the time it is received.

There are presumptions in cl 13.3 as to receipt by post or fax, but not in relation to notice given in some other fashion. The presumption as to receipt of a facsimile in cl 13.3 presupposes specification of a facsimile number.

The parties to the Agreement and the Accession Deed were no doubt well-resourced and represented, and it cannot be assumed that the absence of Details is a mistake – giving rise to an inference that cl 13 was not intended to have strict application other than where writing is specified. But even if it was, that absence has the effect that the only formal requirement (which I consider is strict) is that notice be in writing. Coupled with cl 13.2, this means that all cl 12.11 requires is that there be brought to the attention of the recipient, in writing and with reasonable explicitness, what the contract requires must be notified. [7]

It was not put that the Accession Deed imposed a strict requirement to give notice by posting it to an address which was not that of the addressee. Such a construction would create commercial inconvenience to say the least and should be avoided. 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.

Whilst Macquarie Retail undoubtedly intended to give notice to AMPCFM by emailing it to HSF, perhaps by dint of good fortune, the notice was on-sent to AMPCFM and received by AMPCFM in time. It was not put (nor could it properly have been) that HSF was acting without authority in forwarding the notice to AMPCFM, although I do not think it would have mattered if it was.

From the time of receipt of the notice, AMPCFM knew, from notice in writing, that Macquarie Retail wished to purchase. Accordingly, Macquarie Retail gave it notice in compliance with cl 12.11.

So far as the authority of HSF to receive notice on behalf of AMPCFM is concerned, it is plain that HSF was authorised by AMPCFM (nothing to the contrary was put) to send its 31 March 2023 letter. I would be prepared to infer that NRF understood this request to be one that all future correspondence to AMPCFM be directed to HSF, as the second paragraph of NRF’s 28 April 2023 letter enclosing the Second Notice indicates. HSF’s response on 18 May 2023 refers to service of what purported to be a notice under cl 12.2. The letter took issue with the validity or entitlement to serve a notice but did not take issue that email communication to HSF was not service. Thereafter, NRF emailed the 7 July 2023 letter and Third Notice to HSF.

It is not in issue that a Co-Owner can employ an agent (in this case, NRF) to give notice on its behalf. It is also not in issue that, ordinarily, a solicitor is not implicitly vested with authority to receive notices on behalf of a client. [8] But a solicitor can no doubt be given authority, express or otherwise, to receive notice.

I am not persuaded that HSF had, or conveyed that it had, authority to accept notices (as distinct from correspondence) on behalf of AMPCFM, to the intent that notice given under the Agreement to it was notice to AMPCFM. The distinction may be a fine one, but where valuable contractual rights are concerned, fine distinctions can play a legitimate role. HSF asked that named individuals be copied in on correspondence and gave email addresses for that purpose.

I am also not persuaded that the provision of those email addresses was notification of another address for the purposes of cl 13.1(c), although the submission that it was, is not without some force. The difficulty with it is that a number of different addresses were given, and I do not consider that the Accession Deed gave the addressee the option of requiring notice to be given at multiple addresses. It seems to me that a different address under cl 13.1(c) is one physical address or one facsimile number and the addressor could choose either or both.

I am also not persuaded that the correspondence established an agreement under cl 12.17 to vary in writing the procedures set out in cl 12.17. The method of notice, for the purposes cl 12.11 (because of cl 13), is not a procedure set out in cl 12.17. An agreement to vary cl 13 is not an agreement to vary a procedure set out in cl 12. NRF’s acceding to HSF’s request to be copied in on correspondence does not amount to any agreement in writing.

Turning to the question of good faith, one can readily understand Macquarie Retail being aggrieved that, after HSF’s request, the point is taken that notice was not validly given by Macquarie Retail adopting the course it was asked to adopt. But leaving aside a possible estoppel, the issue whether Macquarie Retail gave notice is strictly contractual. If what Macquarie Retail did was not in compliance with the contract, taking the point is not bad faith.

I uphold AMPCFM’s submission that an estoppel has not been made out. No one from Macquarie Retail gave evidence that an assumption was relied upon that compliance with HSF’s request would dispense with the requirements for notice (whatever they may be) under cl 12.11. To the contrary, when NRF sent their 7 July 2023 letter, they said “as a formality, a hard copy of the notice will be sent to your client by registered post pursuant to cll 12.11 and 13 of [the Agreement]”. Although what the utility of this would have been, given the lateness of that form of notice, is hard to discern, it indicates the absence of reliance on an assumption that email would suffice.

Macquarie Retail is entitled to have the contract for the purchase of the entirety of AMPCFM’s interest in the Property specifically performed. Orders will be made to that effect.

It is not immediately apparent what utility there would be in making the declaration sought. I will hear the parties on the form of relief and costs if not agreed. The parties are to draw to my attention any other matter which remains to be dealt with.

The exhibits are to be returned.