Property Law Update – June 2009
Published on June 18, 2009 by Matthew Rafferty and Paul Carroll
In the recent case Davinski Nominees Pty Ltd v I&A Bowler Holdings Pty Ltd (Retail Tenancies) [2009] VCAT 166 (24 February 2009), the Victorian Civil and Administrative Tribunal reviewed a Relocation Notice served on a Lessee and found it invalid for two reasons :
1. It did not contain sufficient details of the alternate premises. The Notice simply specified the address of the proposed premises. Senior Member Cremean stated that the Lessee should be entitled to more information than just the address, and thought that, considering it was a food premises, information about details of gas linkages, water outlets, cooking facilities, seating facilities and toilet facilities (for example) would be reasonably required.
2. The premises were not comparable. The Victorian Retail Leases Act 2003 requires the Lessor to offer a new lease of “reasonably comparable alternative retail premises”. The New South Wales Retail Leases Act does not include the word “comparable”, however, the New South Wales ADT and Courts have interpreted the New South Wales Act to require some degree of commercial similarity such that the alternate premises are appropriate for the nature and size of the business conducted by the tenant (Skiwing Pty Limited v Trust Co of Australia Ltd [2004] NSW ADT 94 Act 90). As such, the comments of the VCAT are relevant in interpreting the New South Wales Act.
Senior Member Cremean found that the proposed premises were not comparable mainly because the alternate premises were outside the building and on the street. The Tribunal visited the premises where it was evident that there was security issues with premises on the street, and concluded that the alternate premises would be commercially disadvantageous.
It appears, following from the Skiwing series of cases to which VCAT referred, that an important factor in assessing whether or not a relocation is valid is the commercial value of the alternate premises. A Lessee can expect that the alternate premises will be commercially no worse than the current premises when considering a range of factors
