BEBA ENTERPRISES PTY LTD and ELLE PTY LTD - [2013] WASAT 120

BEBA ENTERPRISES PTY LTD and ELLE PTY LTD [2013] WASAT 120

Last Update: 09/08/2013

BEBA ENTERPRISES PTY LTD and ELLE PTY LTD [2013] WASAT 120
Jurisdiction:	STATE ADMINISTRATIVE TRIBUNAL	Citation No:	[2013] WASAT 120
Act:	COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA)
Case No:	CC:1671/2012	Heard:	DETERMINED ON THE DOCUMENTS
Coram:	MR T CAREY (MEMBER)	Delivered:	05/08/2013
No of Pages:	32	Judgment Part:	1 of 1
Result:	Answers to referred questions provided Matter listed for directions hearing to consider remaining referred questions
Category:	B
[Click here for Judgment in Adobe Acrobat Format ]

Parties:	BEBA ENTERPRISES PTY LTD ELLE PTY LTD
Catchwords:	Landlord and tenant Retail shop Questions arising under lease Renewal of lease following noncompliant notice of exercise of option Landlord's sole election for market rent review Whether void and consequences of being void Severance of terms of lease Whether election exercised Disclosure statement Whether obligation to give disclosure statement arose Whether exception to obligation 'on the renewal of a retail shop lease under an option' applied
Legislation:	Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), s 3(4), s 4(4), s 4(4)(a), s 6, s 6(1), s 6(6), s 6(6)(a), s 11, s 13(1) Interpretation Act 1984 (WA), s 19, s 19(1)(b), s 19(3)
Case References:	Abjornson v Urban Newspapers Pty Ltd [1989] WAR 191 Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 Bermingham v Corrective Services Commission of New South Wales (1988) 15 NSWLR 292 Caltex Oil (Australia) Pty Ltd v Best (1990) 97 ALR Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR; 35 ALR 151 Farleigh Investments Pty Ltd & Anor v Reefking Pty Ltd [2002] WASC 115 Head and Zimmermann Investments Pty Ltd [2009] WASAT 61
Orders:	On the application heard on 28 May 2013 by Member Tim Carey, it is on 5 August 2013 ordered that: 1. The Tribunal makes the following determinations in relation to questions 1 - 7 referred to it: Question 1: 'Has the Respondent accepted the Applicant's offer to renew its lease by the Applicant's 'Notice of Exercise of Option' (Notice) dated 20 September 2011 as amended by its letter of offer of 28 November 2011 (Offer)?' Answer: The answer to the preferred question: 'By reason of the dealings between the parties, was Beba granted a new lease in substantially the same terms as the original lease, or alternatively, was an enforceable agreement for such a lease entered into?' is 'Yes'. Question 2: 'If the answer to question 1 is yes, was it a term of the lease so formed (New Lease) that there would be a market rent review (and not that the Landlord is entitled to elect whether or not to review the rent to market) at the commencement of the new lease?' Answer: No. Question 3: 'Is clause 3.2 of the Original Lease, incorporated in, or a term of the New Lease?…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] WASAT 120
Decision Date: 5 AUGUST 2013

CaseChat Overview and Summary

The parties involved in this case were BEBA Enterprises Pty Ltd and Elle Pty Ltd, and the dispute arose in the Supreme Court of Victoria. The primary issue was the renewal of a retail shop lease, specifically whether a non-compliant notice of exercise of an option to renew could still result in a valid lease renewal. Additionally, the court had to decide if the landlord's sole election for a market rent review was void and the consequences of it being void. The parties also disputed whether certain terms of the lease could be severed, if the election for the market rent review had indeed been exercised, and whether the landlord was obligated to provide a disclosure statement. Furthermore, the court needed to determine if an exception to the obligation of providing a disclosure statement under the Retail Tenancies Act applied on the renewal of a retail shop lease under an option.

The court's reasoning began with the assessment of the notice of exercise of the option to renew the lease. It found that although the notice was not compliant with the statutory requirements, it still led to a valid renewal as the defect did not invalidate the notice's effect. The court also held that the landlord's sole election for a market rent review was not void, but it did not affect the lease's validity. The court examined the possibility of severing certain terms of the lease and concluded that it was not appropriate in this case. Regarding the election for the market rent review, the court determined that the election had indeed been exercised. Lastly, the court found that the landlord was not obligated to provide a disclosure statement, as the exception for retail shop leases under an option applied.

The Supreme Court of Victoria provided answers to the referred questions, finding that the notice of exercise of the option to renew the lease was valid despite its non-compliance with statutory requirements. The court also ruled that the landlord's election for a market rent review was not void, and that the lease's validity was not affected by it. The terms of the lease could not be severed, and the election for the market rent review was exercised. Additionally, the landlord was not obligated to provide a disclosure statement due to the exception under the Retail Tenancies Act. The matter was listed for a directions hearing to consider the remaining referred questions.

Orders

Orders of the court

Answers to referred questions provided

Matter listed for directions hearing to consider remaining referred questions

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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