South Veterinary Group Pty Ltd and Sharpe and Anor
[2006] WASAT 371
•4 OCTOBER 2006
SOUTH VETERINARY GROUP PTY LTD and SHARPE & ANOR [2006] WASAT 371
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2006] WASAT 371 | |
| COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA) | |||
| Case No: | CC:1102/2006 | 4 OCTOBER 2006 | |
| Coram: | DR B DE VILLIERS (MEMBER) | 4/10/06 | |
| 8 | Judgment Part: | 1 of 1 | |
| Result: | The application by the respondent for an order that the interim relief granted by the Tribunal on 25 July 2006 expires on 31 October 2006, is refused | ||
| B | |||
| PDF Version |
| Parties: | SOUTH VETERINARY GROUP PTY LTD ROBERT SHARPE JILLIAN SHARPE |
Catchwords: | Commercial tenancies Interim order Extension of interim relief Criteria for grant and extension of interim relief Question arising from a lease Does interim relief expire when the lease terminates or must the questions arising from the lease first be determined to establish if the option to renew was exercised |
Legislation: | Commercial Tenancy (Retail Shops) Agreements Act 1985(WA), s 13(10), s 26(1)(b) Transfer of Land Act 1893 (WA), s 68, s 134 |
Case References: | South Veterinary Group Pty Ltd and Sharpe & Anor [2006] WASAT 222 Nil |
Orders | 1. The application for interim relief succeeds.,2. Until further orders, the respondents is restrained pursuant to s 26(1)(b) of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) from entering the premises, or determining the lease, or changing the locks.,3. There be liberty to apply for costs.,4. In regard to the questions, dated 19 July 2006 arising from the lease, the applicant must, by 11 August 2006, file with the Tribunal and give to the respondents the following documents:,(a) a Statement of Issues, Facts and Contentions it says arise in the proceedings; and,(b) an indexed and paginated bundle in chronological or other logical order of the documents on which it proposes to rely in the proceedings.,5. Within 21 days of receiving the applicant's Statement of Issues, Facts and Contentions, the respondents must file with the Tribunal and give to the applicant their own Statement of Issues, Facts and Contentions setting out:,(a) by reference to each paragraph number in the applicant's statement whether the respondents accept or reject the issues, facts or contentions identified by the applicant; and,(b) any other issues, facts and contentions it says arise in the proceedings.,6. The respondents must, at the time they files and gives their Statement of Issues, Facts and Contentions file with the Tribunal and give to the applicant an indexed and paginated bundle in chronological or other logical order of any documents on which it proposes to rely in the proceedings not in the applicant's bundle.,7. The matter is listed for mediation to commence at 10 am on 13 September 2006 for a duration of one day.,8. If any party proposes to give evidence or call any witness to give evidence at the hearing it must, no less than seven days before the mediation, file with the Tribunal a signed statement of the witness' evidence and give a copy of the statement to the other party. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : COMMERCIAL & CIVIL ACT : COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA) CITATION : SOUTH VETERINARY GROUP PTY LTD and SHARPE & ANOR [2006] WASAT 371 MEMBER : DR B DE VILLIERS (MEMBER) HEARD : 4 OCTOBER 2006 DELIVERED : 4 OCTOBER 2006 FILE NO/S : CC 1102 of 2006 BETWEEN : SOUTH VETERINARY GROUP PTY LTD
- Applicant
AND
ROBERT SHARPE
JILLIAN SHARPE
Respondents
Catchwords:
Commercial tenancies - Interim order - Extension of interim relief - Criteria for grant and extension of interim relief - Question arising from a lease - Does interim relief expire when the lease terminates or must the questions arising from the lease first be determined to establish if the option to renew was exercised
(Page 2)
Legislation:
Commercial Tenancy (Retail Shops) Agreements Act 1985(WA), s 13(10), s 26(1)(b)
Transfer of Land Act 1893(WA), s 68, s 134
Result:
The application by the respondent for an order that the interim relief granted by the Tribunal on 25 July 2006 expires on 31 October 2006, is refused
Category: B
Representation:
Counsel:
Applicant : Mr D South
Respondents : Mr R Griffiths
Solicitors:
Applicant : South Legal
Respondents : Griffiths & Godecke
Case(s) referred to in decision(s):
South Veterinary Group Pty Ltd and Sharpe & Anor [2006] WASAT 222
Case(s) also cited:
Nil
(Page 3)
Summary of Tribunal's decision
1 The Tribunal was requested by the respondents to order that the interim relief granted on 25 July 2006 expires on 31 October 2006.
2 The background to and reasons for the grant of interim relief can be found in the reasons for decision in South Veterinary Group Pty Ltd and Sharpe & Anor [2006] WASAT 222.
3 The respondents contended at the directions hearing on 4 October 2006 that the term of the lease ends on 31 October 2006, and that as a consequence the interim relief could not go beyond the date of expiration.
4 The applicant on the other hand contended that the term of the lease has been lawfully renewed and that the interim relief should be extended since the main questions arising from the lease had yet to be determined by the State Administrative Tribunal.
5 The Tribunal found that the question whether the option to renew the lease had been exercised must take into account the provisions of the lease, the question whether the lease falls within the ambit of the Commercial Tenancies (Retail Shops) Agreement Act 1985 (WA), and whether any breaches of the lease occurred by one or both parties.
6 The parties were in agreement that a "threshold" question is whether the Commercial Tenancies (Retail Shops) Agreement Act 1985 (WA) applies to the lease.
7 The Tribunal was not in a position to make a determination of such an important question at a directions hearing and further evidence and submissions were required. The Tribunal discussed with parties a suitable date for the matter to be heard expeditiously. The Tribunal hence decided that for the same reasons that the interim relief was granted on 25 July 2006, the relief should be extended until the threshold question, namely if the lease is governed by the Commercial Tenancies (Retail Shops) Agreement Act 1985 (WA), and any other questions arising from the lease, were determined.
8 The application was dismissed.
(Page 4)
Background
9 The Tribunal granted interim relief to the applicant on 25 July 2006. In terms of the interim relief the respondents are restrained pursuant to s 26(1)(b) of the Commercial Tenancies (Retail Shops) Agreement Act 1985 (WA) (CTRSA Act) from entering the premises, determining the lease or changing the locks to the premises. The relief was granted until further order.
10 There is no need to revisit the facts giving rise to the application. The facts and the rationale for the decision to grant the interim relief can be found in the reasons for decision in South Veterinary Pty LtdandSharpe & Anor [2006] WASAT 222.
11 On the same day that the interim relief was granted, the Tribunal made detailed programming orders for the application to be progressed towards mediation. A date for mediation was set for 13 September 2006. The respondents wrote to the Tribunal on 29 August 2006 to bring to the Tribunal's attention that the applicant had not complied with the programming orders and that it (respondent) would prefer the mediation to be vacated and for the matter to be listed for hearing.
12 The Tribunal convened a directions hearing on 7 September 2006 to make further programming orders.
13 A further directions hearing was held on 4 October 2006. At this directions hearing various issues were considered, such as the applicant's application to amend the application and the making of programming orders for the matter to proceed to hearing. By agreement between the parties, 18 December 2006 was set for the final hearing. The Tribunal indicated to the parties that if all goes to plan, its decision would be handed down shortly after the Christmas break.
14 The respondents raised an important preliminary issue at the directions hearing of 4 October 2006, namely that the interim relief should automatically expire on 31 October 2006 since it was the date upon which the lease terminated. The respondents thus sought an order for the interim relief to be lifted on 31 October 2006.
15 The Tribunal heard brief submissions from the parties in regard to the preliminary question and after consideration handed down its decision extempore dismissing the application for the relief to expire on 31 October 2006.
(Page 5)
16 After the directions hearing, the respondents sought written reasons from the Tribunal for its decision. The Tribunal requested a transcript of the proceedings and after the receipt of the transcript in December 2006, the reasons were finalised.
17 The Tribunal will now expand on its oral reasons for the refusal to lift the interim relief.
Issue: Should the interim relief granted on 25 July 2006 be lifted on 31 October 2006 due to the purported expiry of the lease?
18 Mr Griffiths for the respondent contended that in light of the purported expiry of the lease on 31 October 2006, the lease could not lawfully be renewed since the lease was not protected by caveat or registered. He referred in this regard to s 68 and s 134 of the Transfer of Land Act 1893 (WA) (TL Act). He contended that even if the applicant could overcome the "seemingly insurmountable difficulties" in relation to s 68 of the TL Act, it would not be entitled to exercise the option of renewal since proper notice for renewal had not been given and the applicant had failed to observe and perform its obligations during the lease.
19 Mr Griffiths concluded that in view of the "imminent determination" of the lease, the application becomes "academic" and a hearing of the questions raised by the applicant seems "pointless". During the directions hearing Mr Griffiths again stressed that the lease does not fall within the ambit of the CTRSA Act and that there was no prima facie evidence to support a finding that the lease may be treated under the CTRSA Act.
20 Mr South for the applicant contended that, as found previously by the Tribunal, there is a prima facie case that the lease falls within the ambit of the CTRSA Act and that the issue whether the lease is governed by the CTRSA Act should be determined by the Tribunal before the other questions arising could be considered. He stressed however that the question whether the lease is regulated by the CTRSA Act can only be answered by the Tribunal after further evidence is heard and submissions are made. For the time being there was, according to Mr South, sufficient information to satisfy the Tribunal that the application must be programmed for hearing and the interim relief must remain on foot for the reasons set out on 28 July 2006.
21 Mr South further contended that the notices of default issued by the respondents were defective since it did not comply with the CTRSA Act. According to him, all the questions arising from the lease can be traced
(Page 6)
- back to the matter of principle and that is "whether or not the Retail Shops Act (CTRSA Act) applies".
22 Mr South concluded that the Tribunal had already found there was sufficient information to conclude that a prima facie case has been made out that the CTRSA Act applies. The parties were therefore entitled to a hearing of the matter and programming orders to that effect should be made. Mr South disputed that the question is merely of academic value as suggested by Mr Griffiths. According to Mr South, the cost to the tenant if they were required to vacate the premises on such short notice, could amount to as much as $600 000. He concluded that regardless of the submissions made by Mr Griffiths, no new evidence had been placed before the Tribunal to justify the lifting of the interim relief.
Consideration
23 In its reasons for decision dated 28 July 2006, the Tribunal emphasised that it was satisfied that on the basis of the information before it, a prima facie case had been made that:
(i) the lease falls within the ambit of the CTRSA Act, and
(ii) the questions arising from the lease can be determined by the State Administrative Tribunal.
24 The Tribunal proceeded to make programming orders to enable parties to submit evidence and make submissions in regard to all the questions arising from the lease.
25 The Tribunal acknowledged, as did the parties, that the threshold question to be addressed in due course by the parties is whether the lease actually falls within the provisions of the CTRSA Act. After the determination of the core question, the remainder of the questions could be addressed in mediation or by a hearing.
26 The Tribunal was not in a position at the directions hearing of 4 October 2006 to make a final determination of the threshold question since further evidence and submissions were required. As a consequence, the Tribunal could also not determine the other questions that arose from the application. Both parties contended that the other had breached the lease and those questions must in due course be determined by the Tribunal. The very question whether the lease expires on 31 October 2006 or whether an option for its renewal had been exercised, is before the Tribunal for determination. Until such time as the question
(Page 7)
- is determined, the interim relief should continue to apply for the reasons given on 28 July 2006.
27 Although Mr Griffiths referred very briefly to the provisions of s 68 and s 134 of the TL Act, he did not provide any reference to authorities to support his contention that due to the working of those sections, the lease expires on 31 October 2006 or that it cannot be renewed. In fact, his reference to s 13(10) of the CTRSA Act seems to support the contention of Mr South, namely that "notwithstanding section 68 of the Transfer of Land Act 1893, an option in a retail shop lease for the tenant to renew the lease is exercisable against any person with a reversionary interest in the premises the subject of the lease whether or not the lease is registered or protected by caveat". (Tribunal emphasis)
28 It is apparent from the proper construction of s 13(10) of the CTRSA Act, that although the lease was not registered or protected by caveat, the option to renew pursuant to cl 45 of the lease could in principle be exercised by the applicant provided that the lease had not been breached.
29 Mr Griffith raised two arguments - firstly that the CTRSA Act does not apply to the lease and secondly that the lease had not been lawfully renewed and that it therefore expired on 31 October 2006. The Tribunal rejects both these arguments for reason that the issues remain to be decided by the Tribunal. The Tribunal also does not accept the contention by Mr Griffiths during oral submissions on 4 October 2006 that "there is not even a prima facie case at this stage". In fact, the Tribunal already made a preliminary finding in this regard and there is no evidence before it to come to a different conclusion.
30 The question whether any breaches of the lease occurred by either party and whether an option has been exercised for the lease to be renewed, are matters of substance for the Tribunal to determine.
31 The Tribunal does not accept the contention of Mr Griffiths that the matter becomes "academic" after 31 October 2006 since, according to Mr Griffiths, the lease automatically expires on that day. The Tribunal is yet to determine if the applicant had breached the lease as is contended by the respondent or whether it (applicant) had renewed the lease.
32 According to Mr South, the applicant had renewed the lease. If that is indeed the case, it would be a severe injustice, given the circumstances of the veterinary practice, to lift the interim relief. The Tribunal pointed this out to Mr Griffiths during the directions hearing.
(Page 8)
33 It is noted that Mr Griffiths did not seek an undertaking from the applicant for damages should the interim relief be extended beyond 31 October 2006 and the application is ultimately dismissed.
34 In light of the information at its disposal and the submissions made by the parties, it would be premature for the Tribunal to make a finding at the stage of the directions hearing that:
(a) the lease is not governed by the CTRSA Act,
(b) that the applicant had breached the lease, or
(c) that the applicant had failed to exercise its option for renewal of the lease.
35 The Tribunal is cognisant that the matter has been before it since July 2006 and it therefore made orders, in consultation with the parties, for the hearing to take place on 18 December 2006.
Finding
36 The Tribunal finds that the application by the respondents for the interim relief to be lifted not later than 31 October 2006 due to the purported expiry of the lease, should be dismissed.
Order
37 The application by the respondents for an order that the interim relief granted by the Tribunal on 25 July 2006 expires on 31 October 2006, is refused.
I certify that this and the preceding [37] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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DR B DE VILLIERS, MEMBER
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