New decision and the cost of s 52(2) RLA 2003 repairs

April 30, 2019

Property / leasing

Deputy President Lulham at VCAT has on 12 April 2019 handed down a decision that is potentially significant in the ongoing issue over the operation of both s 52 of the Retail Leases Act 2003 (Vic) and s 251 of the Building Act 1993 (Vic).

For background to that issue, see here.

Since President Garde J’s opinion in Small Business Commissioner: reference for advisory opinion [2015] VCAT 478 (Opinion), many landlords have maintained that the Opinion does not create a binding precedent and was merely advisory, and have continued to recover from their tenants both the costs of repair and maintenance under s 52 of the RLA 2003 and the costs of essential safety measures under the Building Act and Regulations.

In Deputy President Lulham’s recent decision of Cheng v Wang [2019] VCAT 496, the Tribunal considered claims by a tenant that his landlord is responsible for certain repairs at his cost. The terms of the lease deed required the tenant to be responsible for certain repairs, but the Deputy President found that most of the relevant clauses in the lease deed were inconsistent with the landlord’s repair and maintenance obligations sub-s 52(2) of the RLA 2003. The Deputy President referred to both the Opinion and the decision in Josephine Ung Pty Ltd v Jagjit Associates Pty Ltd [2017] VCAT 2111 (discussed here) and held that the landlord was not able to pass on to the tenant the obligation or cost of repairs under s 52(2) of the RLA 2003. Essential safety measures under the Building Act were not discussed.

The case of Josephine Ung Pty Ltd v Jagjit Associates Pty Ltd [2017] VCAT 2111 was the first application of the Opinion to a case decided at VCAT (see footnote [41] to that decision). The Opinion was also referred to with apparent approval by Croft J in Koga Nominees Pty Ltd v Loscam Australia Pty Ltd & ors [2018] VSC 455; (Building and Property) [2018] VCAT 1274 (see paragraph [18]), but in relation to a different issue.

So far, Cheng v Wang [2019] VCAT 496 appears to be the first application of the reasoning from the Opinion to a repair and maintenance case.

About Sam Hopper

Sam is a property and insolvency barrister.

View all posts by Sam Hopper

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