On 15 December 2017 the High Court of Australia dismissed a landlord’s appeal against a decision in favour of our tenant client in the Court of Appeal in a leading case about retail leasing.
Essentially we encouraged our tenant of a cold storage facility to assert rights under the Retail Leases Act, which is for the protection of tenants. The threshold issue was this: what is the retail supply of services.
When the landlord said no, we went to VCAT. VCAT said not retailing. Nonsense we said and appealed to the Supreme Court where Justice Croft agreed with the tenant.
To our surprise the Landlord appealed to Victoria’s Court of Appeal where three judges (including the former Chief Justice and the new Chief Justice) agreed with Justice Croft.
Still unconvinced, the landlord applied for special leave to appeal to the High Court of Australia. Such leave is very rarely granted and then only if there are significant broad issues. The three judge panel on the High Court was not convinced.
The net consequence is that the Court of Appeal's decision in IMCC Group (Australia) Pty Ltd v CB Cold Storage Pty Ltd [2017] VSCA 178 stands.
Essentially this means that the “ultimate consumer test" remains one of the main factors to look at in determining whether premises are "retail premises" and therefore governed by the Retail Leases Act 2003.
Senior Counsel for the Landlord told the High Court that the Court of Appeal decision will create uncertainty with the letting of larger warehouse type facilities. We agree. It will shift responsibility for significant costs from tenant to landlord, diminish yields and reduce property values in some circumstances.
So it is gratifying to have some of the most significant courts in the land vindicate your advice to a client and to make some legal history.
At Burke Lawyers we act for many landlords of tenants in commercial leasing and related disputes.
