Lindholm, in the matter of Munday Group Pty Limited (Receivers and Managers Appointed) (In Liquidation) v Tsourlinis Distributors Pty Ltd [2011] FCA 195

Lindholm, in the matter of Munday Group Pty Limited (Receivers and Managers Appointed) (In Liquidation) v Tsourlinis Distributors Pty Ltd [2011] FCA 195

Relief against forfeiture was appropriate; the breaches relied on for forfeiture were either remedied or compensable, and it would have been unconscionable for the landlord to insist on termination. The right of first refusal was not triggered by a mere intention to sell but only where there are terms acceptible to a bona fide purchaser. Consent to assignment/change in control could not be unreasonably withheld where financial security was provided. Orders under s 444F would be justified if forfeiture had occurred, and transfer of shares was permissible under s 444GA for proper implementation of the deed arrangement.

Jurisdiction
Australia
Judgment Date
09 March 2011
Procedural Posture
Corporations/commercial / Judgment at Trial
Outcome
Relief against forfeiture granted, landlord restrained from acting on breaches; damages for breach of right of first refusal reserved for later assessment; leave granted to transfer shares without shareholder consent under s 444GA; costs and further orders for assessment of damages reserved.
Legal Topics
['deed Administration' 'relief Against Forfeiture' 'assignment of Lease' 'right of First Refusal' 'orders Under Corporations Act S 444 F and S 444 Ga']
['corporations' 'insolvency' 'landlord and Tenant' 'equity'] ['deed Administration' 'relief Against Forfeiture' 'assignment of Lease' 'right of First Refusal' 'orders Under Corporations Act S 444 F and S 444 Ga']

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Procedural Posture

Corporations/commercial / Judgment at Trial

Legal Issues

  1. 1 ['Whether forfeiture of lease for breaches was justified and if relief against forfeiture should be granted' 'Whether a right of first refusal was triggered by proposed sale/assignment of lease/shares' 'Whether consent to assignment/change of company control unreasonably withheld' 'Orders under s 444F to restrain lessor from taking possession during deed administration' 'Orders under s 444GA to allow transfer of shares without shareholder consent']

Ratio Decidendi

Relief against forfeiture was appropriate; the breaches relied on for forfeiture were either remedied or compensable, and it would have been unconscionable for the landlord to insist on termination. The right of first refusal was not triggered by a mere intention to sell but only where there are terms acceptible to a bona fide purchaser. Consent to assignment/change in control could not be unreasonably withheld where financial security was provided. Orders under s 444F would be justified if forfeiture had occurred, and transfer of shares was permissible under s 444GA for proper implementation of the deed arrangement.

Court Disposition

Relief against forfeiture granted, landlord restrained from acting on breaches; damages for breach of right of first refusal reserved for later assessment; leave granted to transfer shares without shareholder consent under s 444GA; costs and further orders for assessment of damages reserved.

Orders

  • ['Tsourlinis Distributors restrained from terminating or re-entering lease on specified breaches.' 'Relief against forfeiture for breaches including failure to offer right of first refusal.' 'Damages against Upday for breach of cl 7.10 to be assessed.' 'NAB to pay damages assessed by court to Tsourlinis...