Corpco No 23 Pty Ltd v J S Hemingway Investments Pty Ltd [2001] RSLT 4

1 [2001] RSLT 4 THE RETAIL SHOP LEASES ACT In the matter of Dispute 21/01 CORPCO NO. 23 PTY LIMITED - Claimant - and - J S HEMINGWAY INVESTMENTS PTY LIMITED - Respondent DECISION Given in Brisbane on 9 August, 2001. -- 1 of 4 -- Corpco No 23 P/L-v-JS Hemingway Investment P/L 2 Decision THE CHAIRMAN: Gentlemen, I am going to give my decision in this matter now. I will probably in due course revise this decision to add some meat onto the bones, and also to clarify issues which I think need clarifying, but the basis of this decision will stand. The history of the lease between the parties is set out in a chronology prepared by Mr Sweeney of Counsel for the respondent. I have found this very helpful, and I attach it to this decision. The principal question I am asked to rule on is whether the relationship between the parties is governed by the 1984 Retail Shop Leases Act or the 1994 Retail Shop Leases Act. If the 1994 Act applies, then it has been submitted that the claimant is entitled to repayment of that portion of levies imposed by the Body Corporate on the respondent described as contributions to the Sinking Fund. If the 1984 Act applies, then the position between the parties is governed by the provisions of the original lease. These appear in s.3.2 of the lease, which I will not read out, but which will be attached to the decision. It is headed, "Payment of Operating Expenses," and by s.1.20, which defines Operating Expenses - again, I set that out without reading it into the record now. In 1990 Justice Thomas in Malsons Pty Limited -v- the Trustees of Tattersalls' Club, ruled that an assignment of a lease gave rise to a new lease. Probably as a result of this ruling, a definition of "existing retail shop leases" was inserted in the 1994 Act. This definition reads: “existing retail shop lease” means – (a) a retail shop lease entered into or renewed before the commencement of this section; or (b) a retail shop lease entered into, or renewed, under an option under an agreement that was entered into before the commencement of this section; or (c) a retail shop lease entered into under an agreement for lease that was entered into before the commencement of this section; or (d) an assignment of a retail shop lease mentioned in paragraph (a), (b) or (c). The chronology shows that the original lease of 1993 was between TGV Pty Limited as lessor and Wahroonga Holdings as lessee. In February 1994, Wahroonga assigned the lease to Tanacor Pty Limited. This was prior to the 1994 Act becoming law. In terms of the law then applicable as set out by Justice Thomas, the assignment created a new lease. The 1994 Act became law on 28 th October 1994. The lease between TGV -- 2 of 4 -- Corpco No 23 P/L-v-JS Hemingway Investment P/L 3 Decision Pty Limited and Wahroonga Investments Pty Limited was then an existing lease, and I do not think that this can be disputed. On 18 th August 1997, Tanacor Pty Limited assigned its interest to Brookby (NZ) Limited; and on 23 rd May 1998, Brookby (NZ) Limited assigned its interest to Corpco, the present claimant. The claimant's submission is that the assignment of 23rd May 1998 created a new lease on which the commencement date was fixed by s.11 of the 1994 Act. The argument is that there was no previous legal relationship between the parties. The relationship commenced when a lease commenced under the provisions of s.11 of that Act. Acceptance of this argument would result in all assignments of leases creating new leases after 1994. This is in direct conflict with the clause (d) of the definition of "existing Retail Shop Leases Act" in the 1994 Act. Therefore, I cannot accept this argument. I find that the provisions of s.11 apply to the commencement of new leases, not existing leases which have been assigned. The conclusion I have come to is that the provisions of the 1984 Act apply to this lease. I have been asked to make a number of declaratory orders. I am prepared to make the following orders only: 1. That the lease is governed by the provisions of the 1984 Retail Shop Leases Act. 2. That the rights of the parties and their duties are those applying in the original lease, and this includes the provisions relating to operating expenses. I am not prepared to order that the respondent provide the claimant with audited annual statements of operating expenses in so far as detailing special levies and showing what portion is of a capital nature. It is not information which the respondent apparently has or can reasonably obtain, this information depending on the respondent obtaining material from the Body Corporate. I will not make an order which may not be enforceable. I also have not investigated or had argued before me whether a lessor can or is obliged to dissect levies which the lessor itself pays to a Body Corporate in terms of the provisions of the Act and regulations applying to Bodies Corporate. Further, I am not prepared to make any rulings on whether payment by the claimant of contributions including special levies or levies of a capital nature amount to a waiver of its rights now to claim them. This issue raises questions of fact which are not being canvassed before me. I make certain remarks, although aware that they will not be binding on -- 3 of 4 -- Corpco No 23 P/L-v-JS Hemingway Investment P/L 4 Decision another Tribunal if further proceedings follow. I am inclined to the view that if subsequent proceedings are brought, the respondent will have the onus of showing how much of the amounts paid by the claimant were special levies or levies of a capital nature, and also will have to prove any question of waiver. I have given these further indications in the hope that it might lead to the parties recommencing negotiations without the need for further litigation. -- 4 of 4 --