Chipper v Octra Nominees Pty Ltd [2006] FCA 1633

Chipper v Octra Nominees Pty Ltd [2006] FCA 1633

The benefit of the first right of refusal under the lease was held by Octra on trust for the applicants. The variation to the contract with Red Valley on 1 March 2006 was a materially different offer, triggering a fresh obligation under the right of refusal, which was not offered to the applicants. They were entitled to specific performance requiring transfer of the freehold on the same terms as the varied contract with Red Valley, their equitable interest taking priority over Red Valley due to the latter's knowledge of the applicants' rights.

Parties
Applicant: Christopher John Chipper; Applicant: Melody Jane Chipper; First Respondent: Octra Nominees Pty Ltd; Second Respondent: Peter Campbell Smyth (by his Administrators David Andrew Smyth and Robert Lansell Avery); Third Respondent: Red Valley Pty Ltd; Fourth Respondent: Riggindale Pty Ltd; Peter & Angela Robinson as Trustee for the Robinson Superfund and Adina Enterprises Pty Ltd as Trustee for the Two Acres Trust; Adina Enterprises Pty Ltd as Trustee for the Two Acres and Peter Donald Robinson and Angela Ellen Robinson as Trustee for the Robinson Superfund; Riggindale Pty Ltd and Adina Enterprises Pty Ltd as Trustee for the Two Acres Trust; P&P Higginson Pty Ltd
Jurisdiction
Australia
Judgment Date
01 December 2006
Procedural Posture
Civil / Judgment
Outcome
Applicants succeed on claim for specific performance; parties invited to address court on terms of orders and costs.
Legal Topics
Lease and Sub Lease, First Right of Refusal, Specific Performance, Priority of Equitable Interests, Breach of Contract, Trust Over Contractual Benefit
Property Law Contract Law Equity Trusts Lease and Sub Lease First Right of Refusal Specific Performance Priority of Equitable Interests +2 more

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Parties

Christopher John Chipper

Applicant

Melody Jane Chipper

Applicant

Octra Nominees Pty Ltd

First Respondent

Peter Campbell Smyth (by his Administrators David Andrew Smyth and Robert Lansell Avery)

Second Respondent

Red Valley Pty Ltd

Third Respondent

Riggindale Pty Ltd; Peter & Angela Robinson as Trustee for the Robinson Superfund and Adina Enterprises Pty Ltd as Trustee for the Two Acres Trust; Adina Enterprises Pty Ltd as Trustee for the Two Acres and Peter Donald Robinson and Angela Ellen Robinson as Trustee for the Robinson Superfund; Riggindale Pty Ltd and Adina Enterprises Pty Ltd as Trustee for the Two Acres Trust; P&P Higginson Pty Ltd

Fourth Respondent

Procedural Posture

Civil / Judgment

Legal Issues

  1. 1 Whether the first right of refusal under the lease and sub-lease gives rise to an enforceable trust obligation
  2. 2 Whether variation of contract with third-party purchaser triggers a new right of refusal
  3. 3 Priority between equitable interests arising under the lease/sub-lease and third party contracts

Ratio Decidendi

The benefit of the first right of refusal under the lease was held by Octra on trust for the applicants. The variation to the contract with Red Valley on 1 March 2006 was a materially different offer, triggering a fresh obligation under the right of refusal, which was not offered to the applicants. They were entitled to specific performance requiring transfer of the freehold on the same terms as the varied contract with Red Valley, their equitable interest taking priority over Red Valley due to the latter's knowledge of the applicants' rights.

Court Disposition

Applicants succeed on claim for specific performance; parties invited to address court on terms of orders and costs.

Orders

  • Applicants to file proposed minute of orders by 5 December 2006.
  • Respondents to file proposed orders by 7 December 2006.