Strzelecki Holdings Pty Ltd v Bogdanis Nominees Pty Ltd
[2002] WASC 62
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: STRZELECKI HOLDINGS PTY LTD -v- BOGDANIS NOMINEES PTY LTD [2002] WASC 62
CORAM: MASTER BREDMEYER
HEARD: 27 MARCH 2002
DELIVERED : 3 APRIL 2002
FILE NO/S: CIV 1167 of 2002
BETWEEN: STRZELECKI HOLDINGS PTY LTD (ACN 051 222 523)
Plaintiff
AND
BOGDANIS NOMINEES PTY LTD (ACN 008 889 469)
Defendant
Catchwords:
Landlord and tenant - Rent - Rent review clause - Whether dispute over rent increase should be decided by the Commercial Tribunal or the Supreme Court - Interpretation of s 27(1) Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA)
Legislation:
Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), s 27(1)
Commercial Tribunal Act 1984 (WA)
Result:
Application allowed
Category: A
Representation:
Counsel:
Plaintiff: Mr S C England
Defendant: Mr S J Davis
Solicitors:
Plaintiff: Lawton Gillon
Defendant: Allens Arthur Robinson
Case(s) referred to in judgment(s):
About Holdings Pty Ltd v Bellbird Enterprises Pty Ltd (1997) 17 WAR 309
Case(s) also cited:
Beugelaar v City of Springvale [1969] VR 3
Black Swan Holdings Pty Ltd v Hurst & Anor (1993) 9 SR (WA) 285
Fountain Selected Meat (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397
MASTER BREDMEYER: The defendant has applied by chamber summons dated 18 March 2002 for the plaintiff's originating summons to be dismissed. The plaintiff's originating summons seeks a declaration that the rent payable to the plaintiff by the defendant under a deed of sublease is as from 1 November 2001, $324,675.60 per annum.
The background to this dispute is as follows. The plaintiff is the landlord (strictly the sublessor) of the defendant who is the tenant (sublessee). The rented premises are at Hillarys Boat Harbour and the defendant runs a restaurant there, Portofino's Harbour Restaurant Cafe. The defendant was paying rent of $217,383.24 per annum, calculated at $307.92 per square metre. The rent was due for review on 1 November 2001. Clause 6.13 of the sublease provides for the rent review. In summary, the landlord may fix the rent at the current market value, or a formula based on the old rent, plus a CPI adjustment, whichever is the greater. If the landlord chooses to go for the former, he is required to forward to the tenant a notice in writing nominating the reviewed rental which the landlord considers to be the current market rental, and, if the tenant does not object to that proposed increase within 14 days of service of that notice, then the sublessee shall be deemed to and to have accepted the reviewed rent. The clause provides that time is of the essence in respect of the tenant's notice of objection. The landlord's property agent sent such a notice to the tenant on 3 July 2001, notifying it that the landlord considered the current market rent to be $324,675.60 per annum, the increase to start from 1 November 2001. The increase would amount to a rent of $27,056.30 per month. The letter stated:
"For your information the provisions of your lease relating to rent review are set out in clauses 6.13 to 6.13.4.2.4."
It appears that the defendant did nothing within the 14‑day period. Some negotiations ensued about fixing an alternative rent. These negotiations came to naught. So, on 17 January 2002, the defendant referred the matter to the Commercial Registrar of the Commercial Tribunal of WA under s 19(1) of the Commercial Tenancy (Retail Shops) Agreements Act 1985. The reference is quite a lengthy document annexing the relevant lease documents, and setting out in seven pages the matters in dispute. In that document, the question posed for the Registrar is as follows:
"Whether the notice is a valid notice to effect an increase in the annual rental for the Premises from $217,383.24 to $324,675.60 per annum as prescribed in the Lease."
The plaintiff landlord is not keen to have the question of the validity of the increased rent determined by the Commercial Registrar or the Commercial Tribunal. The Commercial Tribunal is chaired by a lawyer, but it has two lay members. I am told that it is not required to follow precedent. An appeal lies from it to a Judge of the District Court. The plaintiff wants the matter determined by the Supreme Court. It issued its originating summons, for the determination of that question, which I have already mentioned, on 13 February 2002. The defendant says that the originating summons should be dismissed, as this Court has no jurisdiction because the matter is already before the Commercial Registrar. The defendant relies on s 27 of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (the Commercial Tenancy Act) which reads:
"27. Other jurisdictions
(1)Where this Act provides for the reference of a question to the Registrar and the question is one that a court also has jurisdiction to determine, proceedings may be instituted to determine the question either —
(a)before the court; or
(b)by way of a reference to the Registrar,
but not both.
(2)Where proceedings are instituted in, or are before, a court for the determination of a question that, but for subsection (1), could be referred to the Registrar the question shall —
(a)if all parties to the proceedings so agree; or
(b)if the court of its own motion or on the application of a party so directs,
be transferred to the Registrar and shall be disposed of as if the question had been referred to the Registrar under this Act.
(3)Where a question has been referred to the Registrar under this Act and the question is one that a court also has jurisdiction to determine, the proceedings for the determination of the question shall —
(a)if all the parties to the proceedings so agree; or
(b)if, on the application of a party or of his or its own motion, the Registrar or, where the matter has been referred by the Registrar to the Tribunal under section 22, the Tribunal so directs,
be transferred to the court and shall be disposed of as if the proceedings had been instituted before the court."
The defendant relies on the decision of About Holdings Pty Ltd v Bellbird Enterprises Pty Ltd (1997) 17 WAR 309, a decision of Parker J. I am told that this is the only decision on the scope of s 27(1). In that case, a party to a lease referred a rental dispute to the Commercial Registrar and from there it was referred to the Commercial Tribunal. On 11 September 1995, before the reference was heard, the party wrote a letter to the Tribunal seeking to discontinue the reference. On 15 September 1995, the same party commenced proceedings in the Supreme Court by way of originating summons for the determination of the same question. On 22 September 1995, the Registrar consented to the discontinuance of the reference to the Tribunal. Parker J held that the proceedings in the Supreme Court were a nullity, which is more than an irregularity because they were contrary to s 27(1). Parker J held that s 27(1) prohibits the institution or commencement of proceedings in a court where the instituting party has previously instituted proceedings by way of a reference to the Registrar which raised the same question. This was so even where the proceedings, by way of reference to a Registrar, had been discontinued by the time of the commencement of the proceedings in court. The proceedings were instituted in contravention of the statutory bar contained in s 27(1) and were therefore a nullity.
That case dealt with the same party lodging a proceeding both before the Commercial Registrar and in the Supreme Court. In the present case, the defendant lodged a proceeding before the Commercial Registrar and the plaintiff lodged a proceeding in the court. I consider s 27(1) prohibits that. A dispute over a retail shop lease is to be instituted in the court, or by way of reference to the Registrar, but not both. Subsections (2) and (3) of s 27 provide some flexibility. Subsection (2) allows the Court, in an appropriate case, to transfer a case to the Registrar. Subsection (3) permits the Registrar, or the Tribunal, in an appropriate case, to transfer a case to the Supreme Court. I am told that the plaintiff landlord has made such an application in this case to the Commercial Registrar. Both sides have tendered written submissions, and I understand the Registrar will determine the application on the written submissions. There is no provision, as there is in some other Acts, permitting the Supreme Court to transfer a case out of the hands of the Registrar, or Tribunal, to the Supreme Court.
I consider this Court has no jurisdiction to entertain the originating summons in view of the prior reference to the Commercial Registrar. The section prohibits both, and I consider a sensible way to interpret it is on a first come, first served basis. On that basis, the defendant got in first. It lodged its reference to the Registrar - from whom it will probably go to the Commercial Tribunal. The plaintiff lodged its action in this Court some weeks later. The Court's jurisdiction is precluded by the clear words of s 27(1). I do not consider it appropriate to stay this action or to refer it to the Commercial Registrar for his consideration under s 27(3).
The defendant's application will be allowed. The originating summons will be dismissed. The plaintiff will have to pay the defendant's costs of the application and of the action. I will hear the parties a little more on the defendant's application that those costs should be allowed on an indemnity basis.
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