VICINITY MANAGER PTY LTD and OM JI OM PTY LTD

[2023] WASAT 54

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL

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

CITATION:   VICINITY MANAGER PTY LTD and OM JI OM PTY LTD [2023] WASAT 54

MEMBER:   DR B DE VILLIERS, MEMBER

HEARD:   DETERMINED ON THE DOCUMENTS

DELIVERED          :   4 JULY 2023

FILE NO/S:   CC 918 of 2023

BETWEEN:   VICINITY MANAGER PTY LTD

First Applicant

ISPT PTY LTD

Second Applicant

AND

OM JI OM PTY LTD

Respondent

Catchwords:

Retail commercial tenancy - Requirements for special circumstance for early termination of lease - Demolition - Redevelopment - Damage and destruction - Breach or default of lease

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)
Commercial Tenancy (Retail Shops) Agreements Regulations 1985 (WA), Sch 1

Result:

Application dismissed

Category:    B

Representation:

Counsel:

First Applicant	:	N/A
Second Applicant	:	N/A
Respondent	:	N/A

Solicitors:

First Applicant	:	Dentons Australia
Second Applicant	:	Dentons Australia
Respondent	:	N/A

Cases referred to in decision:

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 added 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 20); damage and destruction (clause 21) and breach or default of the lease (clause 22.1(c) and clause 22.1(d)).  The address of the tenancy is Kiosk K0026 Mandurah Forum Shopping Centre, 330 Pinjarra Road, Mandurah, Western Australia.

2. Section 13(7) of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) (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. The Tribunal is 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.  The discretion of the Tribunal is wide, which means the Tribunal 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 26 June 2023.

   2.The landlord 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: 20, 21 and 22.1(c) and 22.1(d), for reasons that a special circumstance exists in regard to each of the proposed variations pursuant to subsection 13(7) of the CTRSA Act.

   4.The reason that the landlord says a special circumstance exists is that in future a redevelopment may occur (clause 20); damage may occur that remain unremedied by the landlord for longer than three months (clause 21); and the tenant may be in default due to insolvency (clause 22.1(c) and clause 22.1(d)).

   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 20, 21, 22.1(c) and 22.1(d).

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

   (a)although the Tribunal does have the power to approve clause 20 for early termination due to a redevelopment, the landlord must demonstrate that the special circumstance does actually 'exist'.  In this case it seems as if no actual redevelopment is planned, and the variation is only sought in anticipation of a possible variation (Synicast Pty Ltd at [30]);

   (b)the Tribunal does not have the power to approve clause 21 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 of clause 22.1(c) and clause 22.1(d) for early termination, since the ground is already the subject of s 13(d)(da) and Sch 1, item 1 of the Commercial Tenancy (Retail Shops) Agreements Regulations 1985 (WA).

Order

The Tribunal orders:

1.On the application in respect of a retail shop lease between the parties relating to Kiosk K0026 Mandurah Forum Shopping Centre, 330 Pinjarra Road, Mandurah, Western Australia, it is ordered that the application for the approval of the inclusion of clauses 20, 21, 22.1(c) and clause 22.1(d) 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

4 JULY 2023