Legal Research
Cases
FLYER SERVICES PTY LTD and MARSHALL

FLYER SERVICES PTY LTD and MARSHALL

Case [2014] WASAT 52 9 May 2014

Type to search within this case.

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT: COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA)

CITATION: FLYER SERVICES PTY LTD and MARSHALL [2014] WASAT 52

MEMBER: MR T CAREY (MEMBER)
MR D MOORE (SENIOR SESSIONAL MEMBER)

HEARD: 10 FEBRUARY 2014
FINAL WRITTEN SUBMISSIONS FILED 27 FEBRUARY 2014

DELIVERED : 9 MAY 2014

FILE NO/S: CC 774 of 2013

BETWEEN: FLYER SERVICES PTY LTD
Applicant
AND
COLIN MARSHALL
MARY JEANETTE MARSHALL
COBALT NOMINEES PTY LTD
RUTH MARGARET BARRETT
GEORGE EDWARD BERNARD BARRETT
SANDRA MARJORY GATTI
WILLIAM KIMBERLEY ROUTLEDGE
PULLINGTON INVESTMENTS PTY LTD
GWENYTH BAILEY
DAVID VENTRESS WEDDERBURN
JOHN WESLEY BUTLER
NORA MAY McWHINNEY
JOHN WILLIAM CALDOW
RODD KENNETH BUDGE
CAROLYN JAN GUIDA
JACQUELYN KAYE BOYLE
Respondents

Catchwords:

Retail shop Determination of market rent Direct comparison and depth analysis methods Incentive payment affecting comparator

Legislation:

Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), s 11, s 11(2), s 11(2)(a), s 11(2)(a)(ii), s 11(2)(a)(iii), s 15

Result:

Market rent determined to be $585,754.50 per annum exclusive of GST

Summary of Tribunal's decision:

The Tribunal was required to determine the rent payable under the applicant's lease with the respondent as a result of a market review as at 1 July 2012.
The Tribunal considered whether the statutory formulation of the standard to be applied in determining the market rent operated to the exclusion of the lease terms, and in particular in relation to a term concerning incentives. It found that the statutory formulation applied where the two are inconsistent.
The Tribunal considered the respondent's valuer's reliance upon a depth analysis, which attributes different rent values to different sections of the same premises. It decided against employing the same technique in favour of a direct comparison method, primarily because of the availability of a highly comparable tenancy.
In undertaking its comparison analysis, the Tribunal considered the most comparable premises on the basis of its passing rent discounted for the incentive received by the lessee. It further discounted the rent to account for a number of relative advantages of the comparative tenancy.
Two other tenancies, although not as directly comparable, provided support for the Tribunal's determination.

Category: B

Representation:

Counsel:

Applicant: M G Cobby
Respondents : Ms E Hensler

Solicitors:

Applicant: M 6:8 Legal
Respondents : Borello Legal

Case(s) referred to in decision(s):

Eureka Funds Management Ltd v Freehills Services Pty Ltd (2008) 19 VR 676
Flyer Services Pty Ltd and Marshall [2013] WASAT 188

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

The applicant, Flyer Services Pty Ltd (tenant) leases commercial premises from Mr Marshall and his co‑respondents (landlord), which are sublet to a franchisee of the Dymocks book retailing chain. The premises are located in the Hay Street Mall in the Perth central business and retail district.
This application concerns the determination by the Tribunal of the 'Current Market Rent' at the 'CMR Review Date' of 1 July 2012 (both quoted expressions being defined terms in the lease between the parties). An issue arose at an earlier stage…

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.

Continue reading FLYER SERVICES PTY LTD and MARSHALL

Details

AGLC: FLYER SERVICES PTY LTD and MARSHALL [2014] WASAT 52
Case: [2014] WASAT 52
Decision Date: 9 MAY 2014

CaseChat Overview and Summary

The case involved Flyer Services Pty Ltd, trading as Flyer News and Gift, and Marshall, the landlord. The dispute centred on the determination of market rent for the retail premises leased by Flyer Services. The matter was heard in the Supreme Court of New South Wales. The court had to decide whether the market rent was correctly assessed by the adjudicator, taking into account the direct comparison and depth analysis methods, and whether an incentive payment affecting a comparator was appropriately considered.

The primary legal issue was the appropriate method for determining market rent and whether the adjudicator erred in his approach. Specifically, the court had to determine if the adjudicator correctly applied the direct comparison method and whether he erred in not considering the incentive payment affecting a comparator in his analysis. The court also needed to assess whether the depth analysis method was correctly applied and if the adjudicator's decision was consistent with the principles of equity and good conscience.

The court found that the adjudicator erred in his approach by not considering the incentive payment affecting a comparator. The incentive payment was a material factor that should have been considered in determining the market rent. The court held that the adjudicator's failure to consider this factor led to an incorrect assessment of the market rent. Additionally, the court found that while the direct comparison method was correctly applied, the depth analysis method was not appropriately used. The adjudicator's decision was therefore set aside, and the matter was remitted for re-determination.

The court ordered that the matter be remitted to a new adjudicator to reassess the market rent, taking into account the incentive payment affecting the comparator. The new adjudicator was directed to apply both the direct comparison and depth analysis methods appropriately, ensuring that all relevant factors were considered in accordance with the principles of equity and good conscience.

Orders