GPT RE LIMITED and LAM

[2023] WASAT 52

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL

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

CITATION:   GPT RE LIMITED and LAM [2023] WASAT 52

MEMBER:   DR B DE VILLIERS, MEMBER

HEARD:   DETERMINED ON THE DOCUMENTS

DELIVERED          :   3 JULY 2023

FILE NO/S:   CC 935 of 2023

BETWEEN:   GPT RE LIMITED

Applicant

AND

LAM TRAN LAM

Respondent

Catchwords:

Retail commercial tenancy - Requirements for special circumstance for early termination of Lease - Demolition - Redevelopment - Damage and destruction - Resumption

Legislation:

Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), s 13(6)(a), s 13(6)(b), s 13(6)(c), s 13(6)(da), s 13(6)(d), s 13(7)

Result:

Application dismissed

Representation:

Counsel:

Applicant	:	N/A
Respondent	:	N/A

Solicitors:

Applicant	:	Gadens Lawyers (Vic)
Respondent	:	N/A

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

Synicast Pty Ltd and Showroom X Pty Ltd [2023] WASAT 47

REASONS FOR DECISION OF THE TRIBUNAL:

Background

1. The applicant, who is the landlord of a retail commercial tenancy, has requested approval for three clauses to be included to the lease to allow the landlord to terminate the lease in a period shorter than the statutory guaranteed 5 years due to the existence of special circumstances.  The clauses relate to demolition (clause 17.1); damage or destruction (clause 18.1) and resumption (clause 18.5).  The address of the tenancy is Shop SP0250A, Karrinyup Shopping Centre, 200 Karrinyup Road, Karrinyup, Western Australia.

2. Section 13(7) of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (CTRSA Act) represents a departure from the tenant's right to the option of extending the term of the lease to a period of up to 5 years. The option for an extended period is an important and valuable right to the tenant. This importance is recognised by the CTRSA Act since it prohibits the landlord from terminating the lease short of that 5 year term, save in the limited circumstances set out in s 13(6)(a)-(d) of the CTRSA Act. One of those circumstances is where the Tribunal gives approval on a ground for the termination of a lease under s 13(7) of the CTRSA Act (Synicast Pty Ltd and Showroom X Pty Ltd [2023] WASAT 47 (Synicast Pty Ltd at [21]).

3. I am now called upon to consider the special circumstances identified by the landlord, the response, if any, by the tenant, and to determine whether the approval is granted.  My discretion is wide, which means I can take into account the totality of circumstances to assess whether they meet the threshold of 'special circumstances' (Synicast Pty Ltd at [27], [54] and [62]). It is noted that the tenant has consented to the proposed variations. The matter is determined on the documents.

Facts and consideration

1. The relevant facts giving rise to the decision are as follows:

   1)The application was lodged on 27 June 2023.

   2)The landlord has declared in the application that it had informed the tenant of its intention to lodge the application.  The tenant has consented to the proposed variations.

   3)The landlord seeks approval of the following clauses, 17.1, 18.1, and 18.5, for reasons that a special circumstance exists in regard to each of the proposed variations pursuant to sub-section 13(7) of the CTRSA Act.

   4)The reason why the landlord says a special circumstance exists is that in future a redevelopment or demolition may occur (clause 17.1); damage may occur that permit the landlord to terminate the lease in the event that the Premises or the Centre is substantially damaged or destroyed (clause 18.1); and the Centre may be resumed by a competent authority (clause 18.5).

   5)I now proceed to determine the application on the documents.

   6)I am not satisfied that a special circumstance exists for approval of clauses 17.1, 18.1, or 18.5.

   7)The reasons for me not being satisfied that special circumstances as required in s 13(7) of the CTRSA Act exists are:

   (a)although the Tribunal does have the power to approve clause 17.1 for early termination due to a redevelopment or demolition or substantial repair, the landlord must demonstrate that the special circumstance does actually 'exist' (Synicast Pty Ltd at [30]).  In this case it seems as if no actual redevelopment or demolition is planned, and the variation is only sought in anticipation of a possible demolition;

   (b)the Tribunal does not have the power to approve clause 18.1 for early termination due to unremedied damage or destruction, since those conditions do not exist, and the variation is only sought in anticipation of the potential of damage or destruction (Synicast Pty Ltd at [30]); and

   (c)the Tribunal does not have the power to approve the clause for resumption since that is not a special condition as anticipated by s 13(7) of the CTRSA Act because a resumption can be dealt with by way of other remedies at the disposal of the parties. It is also noted that there is no actual proposal for resumption and hence the circumstance, even if I had the power to approve it, does not exist.

Orders

The Tribunal orders:

1.On the application in respect of a retail shop lease between the parties relating to Shop SP0250A, Karrinyup Shopping Centre, 200 Karrinyup Road, Karrinyup Western Australia, it is ordered that the application for the approval of the inclusion of clauses 17.1, 18.1 and 18.5 in the lease is dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.

DR B DEVILLIERS, MEMBER

3 JULY 2023