Redgum Developments Pty Ltd v G8 Education Ltd - [2020] VSC 142

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

COMMERCIAL LIST

S ECI 2018 02947

REDGUM DEVELOPMENTS PTY LTD (ACN 082 373 822)	Plaintiff
v
G8 EDUCATION LIMITED (ACN 123 828 553)	Defendant

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JUDGE:	NICHOLS J
WHERE HELD:	Melbourne
DATE OF HEARING:	25 November 2019
DATE OF JUDGMENT:	30 March 2020
CASE MAY BE CITED AS:	Redgum Developments Pty Ltd v G8 Education Ltd
MEDIUM NEUTRAL CITATION:	[2020] VSC 142

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CONTRACTS – Construction – Interpretation – determination of market rent by expert valuer – Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd [2013] VSCA 17 – Legal & General Life of Australia v A Hudson Pty Ltd (1985) 1 NSWLR 314 – Adnow Pty Ltd v Greenwells Wollert Pty Ltd [2016] VSCA 282 – Boland v Yates Property Corporation Pty Ltd (1999) 74 ALJR 209 at 266 – Spencer v Commonwealth (1907) 5 CLR 418 – Challenger Property Asset Management Pty Ltd v Stonnington City Council (2011) 34 VR 445 at 456–7 – Strike Australia Pty Ltd v Data Base Corporate Pty Ltd [2019] NSWCA 205 – construction of provision of lease incorporating section 37(2) of the Retail Leases Act 2003 (Vic) – requirement of the valuer “having regard to” certain “criteria” – R v Hunt, Ex parte Sean Investments Pty Ltd (1979) 180 CLR 322 – Western Australian Trustees Ltd v Poon (1991) 6 WAR 72 – Origin Energy Electricity Ltd v Queensland Competition Authority [2012] QSC 414 – Rathborne v Abel (1964) 38 ALJR 293.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr L Virgona	MA Legal
For the Defendant	Ms R V Howe	Allens

HER HONOUR:

The issue in this case is whether or not a determination of the market rental for a property at 40 Marlborough Road, Heathmont in Victoria, made by valuers appointed by agreement pursuant to the lease between the landlord and the tenant, was made in in accordance with the terms of the lease.

The plaintiff (Redgum) is the registered proprietor of the Heathmont property (the Premises), which is leased to the defendant (G8), for use as a child care centre. Redgum contends that the rental determination was not made in accordance with the lease, and it should be set aside. G8 defends the valuation.

For the reasons that follow, in my opinion the rental determination was made in accordance with the requirements of the lease and there is no basis for this Court to set it aside. It remains binding on the parties.

Background

Redgum originally leased the Premises to A & A Childcare Centre Pty Ltd, by a lease agreement dated 22 October 2007 (the Lease). The lease was varied by transfer to G8, on or about 28 September 2012. The transfer makes G8 liable as tenant to the terms of the Lease. This had the effect of bringing the Lease beyond the scope of the Retail Leases Act 2003 (Vic), which does not apply to…

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: [2020] VSC 142
Decision Date: 30 March 2020

CaseChat Overview and Summary

Redgum Developments Pty Ltd, the plaintiff, brought an action against G8 Education Ltd, the defendant, in the Supreme Court of Victoria to determine the market rent for a retail lease under the Retail Leases Act 2003 (Vic). The dispute centred around the interpretation of a clause in the lease that required the market rent to be determined by an expert valuer, taking into account specified criteria. The plaintiff argued that the valuer should have considered additional factors not explicitly mentioned in the lease.

The primary legal issue was how to interpret the phrase "having regard to" certain criteria in the lease, and whether it required the valuer to strictly adhere to those criteria or if they could consider other relevant factors. The court examined relevant case law, including Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd, Legal & General Life of Australia v A Hudson Pty Ltd, and others, to understand the scope of the phrase "having regard to." The court also considered legislative intent and the broader context in which the phrase was used.

The Supreme Court of Victoria found that the phrase "having regard to" did not mandate strict adherence to the specified criteria, but rather allowed the valuer some discretion in determining market rent. The court held that the valuer was entitled to consider other relevant factors, provided they gave appropriate weight to the specified criteria. The court dismissed the plaintiff's claim, upholding the valuer’s determination of the market rent.

No further orders were made by the court.

Orders

Orders of the court

The plaintiff’s claim is dismissed.

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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