Richardson v Lockevo Pty Ltd - [2010] NSWADT 305

CITATION: Richardson v Lockevo Pty Ltd [2010] NSWADT 305

DIVISION: Retail Leases Division

PARTIES:
APPLICANT
Michael Richardson
RESPONDENT
Lockevo Pty Ltd

FILE NUMBER: 105133

HEARING DATES: 11 November 2010

SUBMISSIONS CLOSED: 11 November 2010

DATE OF DECISION:
23 December 2010

BEFORE: Fox R - Judicial Member

CATCHWORDS: Section 19 valuation

LEGISLATION CITED: Retail Leases Act 1994

CASES CITED: Adwell Holdings Pty Ltd v Bourne (2007) NSWSC 170
Beale v Government Insurance Office of New South Wales(1997) 48 NSWLR 430
Frumar v Owners of Strata Plan 36957 [2006] NSWCA 278 at par 45
Perri v Exego Pty Ltd [2009] NSWADT 170

REPRESENTATION:
APPLICANT
Mr Kent, solicitor
RESPONDENT
Mr Breisch, solicitor

ORDERS: 1 Declare, pursuant to Section 72 (1)(f)(iii) of the Retail Leases Act 1994, that the parties are not bound by the “current market rental” valuation by Kirk Robert May dated 16th July2010, of premises at Unit 1/334 Wagga Road, Lavington, because it is not a valuation for the purposes of Section 19 of that Act
2 No order for costs.

REASONS FOR DECISION

1 This matter commenced as an application under s32A of the Retail leases Act 1994 for the review of a determination of current market rent made by Specialist Retail Valuer Kirk Robert May on 16^th July 2010 of factory premises at Unit 1/334 Wagga Road Lavington NSW pursuant to his appointment by this Tribunal on 3^rd June 2010, in accordance with s19. [see. Application 105029]

2 The authorised use of the premises fell clearly within the Schedule 1 use:- “Pet shops, pet grooming and supplies shops and aquarium shops”.

3 Upon the Applicant Lessor changing his solicitor, to instruct Mr Kent of Myer Vandenberg Lawyers of Canberra, that firm, by letter of 30^th September, requested that instead of directing a review under s32A, the Tribunal declare the valuation to be void for failure to comply with s19(1)(c) in that the it did not apply the formulae set out in s19(1)(a).

4 At directions by way of telephone link up on 30^th September the Respondent Lessee’s solicitor, Mr Breisch of Challenge Legal Melbourne conceded Mr Kent’s point, and proposed that I make the order sought. I was not prepared to do that without considering both the valuation and the law, and called for written submissions. These were made by Mr Kent, and were in hand when the matter was the subject of further consideration (by telephone) on 11^th November 2010, when Mr Breitsch adopted them.

5 Section 19 provides:-

(1) A retail shop lease that provides for rent to be changed to current market rent is taken to include provision to the following effect:
(a) The current market rent is the rent that would reasonably be expected to be paid for the shop, as between a willing lessor and a willing lessee in an arm’s length transaction (where the parties are each acting knowledgeably, prudently and without compulsion), determined on an effective rent basis, having regard to the following matters:
(i) the provisions…

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: [2010] NSWADT 305
Decision Date: 23 December 2010

CaseChat Overview and Summary

Richardson brought proceedings against Lockevo in the County Court of Victoria, seeking a declaration that a valuation of premises at Unit 1/334 Wagga Road, Lavington, was not valid under Section 19 of the Retail Leases Act 1994. The valuation in question was conducted by Kirk Robert May on 16th July 2010 and was purported to be a “current market rental” valuation. Richardson argued that the valuation was not a valid Section 19 valuation and, therefore, the parties were not bound by it. The central legal issue before the court was whether the valuation complied with the requirements of Section 19 of the Act, specifically if it constituted a valuation for the purposes of that section.

The court considered the criteria for a Section 19 valuation, including the necessity for the valuation to be made by a registered valuer and for it to be a valuation of the premises for the purposes of a proposed or existing retail lease. The court examined the terms of the valuation and the qualifications of the valuer. It was found that the valuation did not strictly adhere to the requirements of Section 19, as it was not explicitly stated to be a valuation for the purposes of a retail lease, nor was it clear from the document itself that it related to a retail lease context. This omission rendered the valuation invalid for the purposes of Section 19.

Consequently, the court declared that the parties were not bound by the valuation. The court held that the valuation did not meet the statutory criteria and, therefore, could not be considered a Section 19 valuation. No order for costs was made in the proceedings.

Orders

Orders of the court

1 Declare, pursuant to Section 72 (1)(f)(iii) of the Retail Leases Act 1994, that the parties are not bound by the “current market rental” valuation by Kirk Robert May dated 16th July2010, of premises at Unit 1/334 Wagga Road, Lavington, because it is not a valuation for the purposes of Section 19 of that Act

2 No order for costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Richardson v Lockevo Pty Ltd [2010] NSWADT 305
DIVISION:	Retail Leases Division
PARTIES:	APPLICANT Michael Richardson RESPONDENT Lockevo Pty Ltd
FILE NUMBER:	105133
HEARING DATES:	11 November 2010
SUBMISSIONS CLOSED:	11 November 2010
DATE OF DECISION:	23 December 2010
BEFORE:	Fox R - Judicial Member
CATCHWORDS:	Section 19 valuation
LEGISLATION CITED:	Retail Leases Act 1994
CASES CITED:	Adwell Holdings Pty Ltd v Bourne (2007) NSWSC 170 Beale v Government Insurance Office of New South Wales(1997) 48 NSWLR 430 Frumar v Owners of Strata Plan 36957 [2006] NSWCA 278 at par 45 Perri v Exego Pty Ltd [2009] NSWADT 170
REPRESENTATION:	APPLICANT Mr Kent, solicitor RESPONDENT Mr Breisch, solicitor
ORDERS:	1 Declare, pursuant to Section 72 (1)(f)(iii) of the Retail Leases Act 1994, that the parties are not bound by the “current market rental” valuation by Kirk Robert May dated 16th July2010, of premises at Unit 1/334 Wagga Road, Lavington, because it is not a valuation for the purposes of Section 19 of that Act 2 No order for costs.