Purchaser of Tasmanian shopping centre wins on misrepresentation

In brief - Purchaser successful in claim against seller of shopping centre

Recently the Federal Court of Australia found that a seller had misled and deceived a shopping centre buyer as to the terms of the lease of an anchor tenant.

Variation to Kmart's lease terms registered on title

The case Merost Pty Ltd v CPT Custodian Pty Ltd [2014] FCA 97 concerned a shopping centre two kilometres from the CBD in Launceston, Tasmania. A lease to retailer Kmart at the centre accounted for approximately 60% of rental revenue for the centre. This lease commenced in 1999.

The lease was amended, with a variation document registered on title, in 2010. The lease referred to a figure important to a turnover rent calculation as approximately $21 million. The variation revised that figure to approximately $24 million.

Information memorandum in electronic data room gives wrong turnover rent figure

As is common for transactions of this scale, in mid-2011 the seller had a data room and information memorandum prepared for the sale of the centre. The memorandum...