Application of the Retail Leases Act 2003 (Vic) to leases of 15 years or more: LFRACM INC v Halski Pty Ltd [2025] VCC 1506

Many readers will be familiar with the Ministerial determination that excludes lease with a term of 15 years or more (and certain other related leases) from the Retail Leases Act 2003 (Vic).  For those who are not, a copy of that determination is available by following the link here.

The 15 year determination has been a source of some controversy since it was first published in 2004.  His Honour Judge Macnamara in the County Court of Victoria recently gave detailed consideration to the meaning and effect of that determination in the case of LFRACM INC v Halski Pty Ltd & Anor [2025] VCC 1506 (16 October 2025) and in his Honour’s supplementary reasons in LFRACM INC v Halski Pty Ltd & Anor (No 2) [2025] VCC 1557.

The headline from his Honour’s decision is that:

1. a lease will not invoke the 15 year determination to exclude that lease from the RLA 2003 if it does not contain specific obligations to undertake substantial work that can be identified when the lease was entered into;  and
2. a general ‘keep in repair’ covenant is not sufficient, even if the covenant extends to any capital works that may arise during the term.

The decision also considered an argument (which his Honour did not accept) that the parties to a lease deed containing a covenant that the 15 year determination applies to the lease are estopped from denying that the determination applies.

So far as I am aware, this is the first time that the 15 year determination was considered by a court.  In the current climate of increasing state taxes on land, this decision is likely to prove significant in those industries in which leases of 15 years or more are commonplace.

Ben Kelly and I recently prepared a paper that considers his Honour’s decision, its background and implications in some detail.  The paper goes into these issues in quite a lot of detail, so I have provided a link to the whole paper here.