John Gandel loses $20 million Myer recoupment case

John Gandel loses $20 million Myer recoupment case
John Gandel loses $20 million Myer recoupment case

Property tycoon John Gandel has lost his case seeking to claw back $20 million in his dispute with the Chadstone Shopping Centre retailer Myer.

It alleged there had been a mistake in the drafting of the variable outgoings provisions in the lease for Myer Chadstone.  

It was alternatively suggested there that those provisions have been misinterpreted.

The variable outgoings covered payments such as council and water rates, land tax, building insurance and property management fees. 

ASX-listed Vicinity Centres said it was "disappointed" by the decision and advised it was "considering its options".

"The Supreme Court of Victoria handed down judgment in favour of Myer and dismissed the claims made by the landlord," it said in a statement to the market. 

Vicinity recently advised the portfolio valuation increase of $324.1 million or 12.1% uplift in its investment in Chadstone Shopping Centre.

Chadstone was independently valued at $6 billion with the capitalisation rate firming from 4.25% to 3.75%.

It advised Chadstone continues to trade strongly following completion of the $666 million (Vicinity share: $333 million) major development in June 2017. 

The case resulted in an 84 page judgement in the Victorian Supreme Court with Justice Clyde Croft rejecting the claims made by the joint owner of Chadstone for rectification of the lease and payment of alleged unpaid outgoings between 2000 and 2016 totalling $19.14 million, plus GST, interest and costs. 

Justice Croft dismissed the plaintiffs' claims that mistakes in the lease contained "infelicities or absurdities" that resulted in underpayment by Myer and misinterpretations that needed rectification.

He also dismissed claims there could have been "incompetence, and possible negligence" by eight experienced lawyers and property professionals that drew up the original lease. 

"There is, in my opinion, simply no basis for supposing such endemic incompetence or negligence on the part of these apparently relevantly skilled and experienced individuals," Justice Croft ruled. 

The action was brought by fund manager Perpetual, acting as a custodian for Gandel Management, and Bridgehead, the landlord of Myer Chadstone.

The original negotiations took place nearly three decades ago.

Witnesses' recollections of at least 14 drafts exchanged between various parties were "sporadic and hazy, as would be expected", the judge noted.

The lease was executed in September 2001 and the plaintiffs discovered the mistake 11 years later.  

Myer did lose its defence that the legal action was disallowed by the statute of limitations.

Tags: 
Shopping Centre Myer

Comments

Be the first one to comment on this article
What would you like to say about this project?