August 19, 2021


Wait times in the Building and Property list at VCAT

A consideration that almost always arises in litigation is the time to trial. This is particularly relevant in retail leasing disputes heard at VCAT, because the parties are usually in an ongoing relationship of landlord and tenant and delay can at times extinguish the subject-matter of the litigation.

For those considering this issue, VCAT has just released an update to practitioners stating that (emphasis added):

Since the onset of the COVID-19 pandemic, VCAT transferred from in-person hearings to conducting matters via telephone and videoconference. This has been a substantial change to our way of operating and has resulted in lengthier proceedings, reducing our capacity to hear and determine cases.

We are continually adapting to these changes and making the best use of our limited resources, but unfortunately we have not been able to stop the increase in wait times across all of our Divisions and Lists. This has now resulted in considerable delays.

For claims relating to building and property, new matters are currently being listed for a final hearing around 37 to 53 weeks from the date of application.

Many matters may not need to proceed to a final hearing. VCAT has been encouraging parties in most cases to attend a mediation or compulsory conference to try and resolve disputes sooner. These methods have been successful in resolving almost half of our cases within the last financial year.

Nonetheless, we understand the impact and frustration these delays can cause and are working hard to try and reduce these backlogs. VCAT is currently developing or trialling a range of methods to hear more cases within our capacity limits, as well as receiving investment from the Victorian Government to increase our digitisation program.

We thank you for your understanding during this difficult time.

Retail tenancy dispute fall within the Building and Property List, so are subject to these wait times.

The impact of these wait times will vary from case-to-case, but all practitioners with current retail tenancy disputes at VCAT or who are considering commencing those proceedings for their clients should be aware of these wait times.

(And no, the CTRS Regulations have not come out yet.)

August 10, 2021


The CTRS Act is now available…

The Commercial Tenancy Relief Scheme Bill 2021 (Act) is available on the Parliamentary website and a copy of it is available here:

And, yes, I accidentally wrote “now” instead of “not” in my last post. I have now fixed it. Grrrrrrrr – autocorrect!!!!!!!!

No news on the Regulations yet.

August 10, 2021

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Yet more on the new CTRS…

I am reliably informed that the Commercial Tenancy Relief Scheme Bill 2021 (Vic) has passed through both houses of Parliament and has now received Royal Assent, although the Act is not yet on the Parliamentary website.

No news yet on when the new Regulations will be passed. I will post as soon as I hear anything.

August 4, 2021


A new Bill for the recovery of ESMs in shopping centres

OK – so this is one with a bit of a history to it.

Since about 2015, it became clear that s 251 of the Building Act 1991 (Vic) prevented landlords from recovering from their tenants the cost of essential safety measures and other costs of complying with that Act (see

Amendments were made to the RLA 2003 and the Building Act last year that allow landlords to recover essential safety measures from tenants of retail premises leases (see

This left landlords in shopping centres in the awkward position of being able to recover ESMs from retail tenants, but not from non-retail tenants.

To address this, the Building Amendment (Registration and Other Matters) Bill 2021 (Vic) was introduced into Victorian Parliament yesterday. The Member of Parliament introducing the Bill described its purposes as:

This bill will enable retail landlords to recover costs associated with the maintenance of essential safety measures from tenants under a retail lease located within a retail shopping centre that does not fall under the definition of a retail premises lease in the Retail Leases Act 2003.

A copy of the Explanatory Memorandum is available here:

A copy of the Bill is available here:

It appears that landlords of leases that are not in shopping centres and are not under the RLA 2003 still face difficulties in recovering ESMs from their tenants.

Thanks to Sean Huggins from Gadens for alerting me to this.

August 3, 2021


Yet more on the new CTRS…

I trust that most of you have read the new Bill and are ready to sit an exam on its contents.

For those up who are waiting on my summary … the new Bill is enabling legislation, largely based on the Omnibus Act that was passed in 2020. We will need to wait to see the Regulations to see the real detail of the new/revised scheme.

My good friends at Eastern Bridge Lawyers have produced a detailed summary of this morning’s press release and the new Bill here:

August 3, 2021


Even more on the new CTRS…

The Commercial Tenancy Relief Scheme Bill 2021 (Vic) is now available here:

I will post a summary shortly.

August 3, 2021


More information about the new CTRS …

The Victorian Government has just released another press release about the new CTRS, a copy of which is here:

Highlights include the following:

  • new legislation will be introduced today (there is nothing on the Parliamentary website yet);
  • landlords and tenants are encouraged to start negotiating as soon as possible;
  • rent relief for eligible tenants will be calculated by comparing their turnover for the final quarter of the 2020/21 financial year with turnover from the final quarter of 2018/19;
  • tenants will be eligible for the scheme if the drop in turnover is greater than 30 per cent;
  • the percentage drop will also determine the amount of initial rent relief available to the tenant;
  • eligibility for the scheme will be a one-time test. Businesses which are eligible at the beginning of the scheme will remain eligible throughout, with the proportion of rent relief adjusted in line with their turnover;
  • for eligible applications under the new scheme where there is also an agreement already in place from the first Commercial Tenancy Relief Scheme, existing deferred rent repayment requirements will be frozen until 15 January 2022, when the outstanding amount will be added to the deferred rent accrued during the current Scheme;
  • the Government will provide landlords wiht land tax relief of up to 25 per cent;
  • small landlords who can demonstrate acute hardship will be eligible to apply for payments as part of a $20 million hardship fund; and
  • landlords can’t issue an eviction notice for eligible tenants without obtaining a direction from the Victorian Small Business Commission. This exception to the moratorium on evictions is new.

Thanks to Paul Nunan for forwarding the press release to me.

I’ll post details of the legislation as it comes to hand.

July 28, 2021


A new rent relief scheme has been announced

The Victorian Government today announced a new/extended rent relief scheme for small to medium sized tenants in Victoria.

A copy of the press release is available here:

At this stage, there are more ‘unknowns‘ than ‘knowns‘, particularly as the previous scheme was tied to Jobkeeper, which is no longer in operation.

Here are a few of the things we do know:

  1. The scheme will be available to tenants with a turnover of less than $50M and have shown a 30% downturn in trade due to the coronavirus. We do not yet have details on how these thresholds will be defined and tested in the legislation.
  2. The proposed legislation will keep the requirement that landlords provide rent relief proportionate the tenant’s downturn in trade compared to pre-pandemic levels, at least half of which is by way of waiver and the remainder deferred.
  3. Mediation will be available.
  4. New legislation will give effect to the new/revived scheme, which will apply from today (28 July 2021).
  5. There will be an $80M hardship fund for landlords who provide rent relief. We do not have any details on this fund yet.

For those looking for a more detailed discussion of the ‘knowns‘ and ‘unknowns‘, have a look at the excellent post from Eastern Bridge Lawyers here:

As usual, I will post any information as soon to this log as it comes to hand.

March 5, 2021

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VCAT finds that a head lease is not a retail premises lease under the RLA 2003

In another recent development, this time under the Retail Leases Act 2003 (Vic) (RLA 2003),[1] Senior Member Forde at VCAT has held that a head lease is not a lease of retail premises under that Act.

In Izett St Pty Ltd v Applgold Pty Ltd (Building and Property) [2021] VCAT 174, Senior Member Forde at VCAT heard as a preliminary quesiton in the proceeding arguments about whether a head lease could be considered a lease of retail premises under the RLA 2003.  

The head tenant’s main business was to sub-lease parts of the demised premises to retail tenants.  

The head tenant argued that the sub-tenants were the ultimate consumers of the sub-leased space and, as a result, the tenant was engaging in a retail supply, applying the reasoning from C B Cold Storage and similar cases.

The landlord argued that:

  1. a retail premises must be open to the public;  and 
  2. the head lease was not open to the public because the sub-tenants had exclsuive possession of those parts of the leased premises that they sub-leased.

The Tribunal rejected the landlord’s argument and held that:

44.    I am however satisfied that the Premises is ‘open to the public’ in the sense that between sublets it is possible for a member of the public to enter a space available for sublet. There is no evidence to suggest that any person is prohibited from subletting a space in the Premises. …

However, the Tribunal found for the landlord on a different basis.  Sub-section 4(1) of the RLA 2003 states that (emphasis added):

(1)       In this Act, retail premises means premises, not including any area intended for use as a residence, that under the terms of the lease relating to the premises are used, or are to be used, wholly or predominantly for—

(a)       the sale or hire of goods by retail or the retail provision of services; or

(b)       the carrying on of a specified business or a specified kind of business that the Minister determines under section 5 is a business to which this paragraph applies

The Tribunal made the following findings:

49.    … Once the sublease is granted, the applicant is no longer able to ‘use’ the premises. It has given exclusive possession to a subtenant. The only space available for the applicant to use after the Premises is sublet is the communal kitchen facilities.

50.    Had the applicant offered licences to the public to use parts of the Premises it may have been more akin to the provision of services. Unlike a caravan park, serviced office, conference centre or cold storage facility, the applicant gave exclusive possession often for years at a time to its subtenants thereby giving away the right to use the Premises. 

51.    Subletting premises is not the provision of a service in the sense required by the RLA. If that were the case every sublet premises could be classified as a retail premises. The provision of kitchen facilities by the applicant does not make the Premises retail premises. Unlike the tenant in Fitzroy Dental or Stringer, the applicant is not integral to the operation of the subleases once granted. 

52.    When all the features of the Premises are taken together as required by Cold Storage, the conclusion must be that the Premises is not retail. 

Practitioners should be aware of this decision in case it is suggested that a head lease falls under the RLA 2003.

[1] It’s been so long since I have done a post about the RLA 2003 that I feel that I must redefine the term!

March 5, 2021


Another decision from VCAT about the CTRS Regs

VCAT has recently handed down another decision about the CTRS that readers should be aware of.

The first thing to note is that the decision was on an application for an interlocutory injunction.  That means that the applicant (in this case, the tenant) needs to show an arguable case (also known as a serious question to be tried or a triable issue) in order to be entitled to an interlocutory injunction.   Once that is established, the Tribunal makes orders to preserve the status quo and final determination of the triable issue is put off to a later date (usually 6 to 12 months away).  Consequently, as far as arguments under the CTRS are concerned, a decision in an application for an interlocutory injunction will only determine whether a particular case is arguable or unarguable.  At this stage, the Tribunal will usually not determine whether or not an argument is correct.

So, bearing that short lecture in mind, the recent case is Karting Madness Pty Ltd v Daniel Terrence Pty Ltd (Building and Property) [2021] VCAT 159, was heard and determined by Member Kincaid at VCAT, with reasons published on 26 February 2021.  In that case, the landlord served a default notice and attempted to re-enter the premises on the basis of:

  1. rent arrears that accrued during the operation of the CTRS;  and
  2. alterations to the leased premises that the landlord said breached planning laws.

The tenant argued that:

  1. the tenant’s protections from re-entry for non-payment of rent under regs 9(2) and (3) of the Principal Regulations was an accrued right that survived the amendment of the Regulations on 29 September 2020 and was not extinguished by those amendments;
  2. the landlord and tenant had entered into an agreement for rent relief during the first version of the CTRS Regs that operated between 29 March 2020 and 29 September 2020 (referred to in the reasons as the Principal Regulations) and was continuing to comply with that agreement.  As a result, the tenant argued that it was entitled to protection from re-entry during the COVID period under regs 9(2) and (3) for any default, including termination for the alleged breaches of planning rules;
  3. it was unclear on the evidence whether the works that were alleged to breach the planning restrictions were the tenant’s fitout or the landlord’s works and there were defects in the landlord’s default notices that prevented the landlord from re-entering in reliance on those notices;  and
  4. it was unconscionable conduct in breach of s 77 of the RLA 2003 for the landlord to re-enter in the particular circumstances of this case (discussed further below).

The Tribunal made orders for an interlocutory injunction and included the following interesting findings.

First, the Member held that it was arguable that the tenant’s protection from re-entry under the Principal Regulations survived the subsequent amendments to those Regulations. Member Kincaid provided the following reasons (footnote from original):

111.     I note however, that it is clear that Parliament may by an Act of Parliament, in respect of the promulgation of delegated legislation under that Act, as it has done in respect of any regulations made under the Act, grant a power for such regulations (whether amending or otherwise) having a retrospective effect, such as may (in the case of amending regulations) affect rights and obligations acquired under previous iterations of those regulations.[1]  

112.     Pursuant to section 15(4) of the Act, regulations made under section 15 of the Act may “[have] retrospective effect to a day not earlier than 29 March 2020”.

113.     Moreover, regulation 3 of the Principal Regulations’ Amendments, demonstrating a clear statement against an assumption that may otherwise be made against any retrospective operation of the Principal Regulations’ Amendments, imposes a retrospective operation of the Principal Regulations’ Amendments, as follows:

3   Commencement

These Regulations are taken to have come into operation on 29 March 2020.

114.     This provision is of course exactly the same provision as appeared in the Principal Regulations.

115.     Section 3 of the Principal Regulations’ Amendments must be presumed to have been intended by Parliament, but to what end, it may be considered. It is difficult to accept, for instance, that Parliament intended for tenants, having entered into an agreement under regulation 10(6) of the Principal Regulations, and having complied with regulations 10(1)–(5) of the Principal Regulations, to be required to enter into a new agreement for the same “relevant period” under the materially different provisions contained in regulations 10(1)–(5) of the Principal Regulations’ Amendments.[2]

116.     It is also difficult to consider that the law is other than that if, as I suggest, a tenant has a right under regulation 9(1) of the Principal Regulations not to be considered in breach of the eligible lease if, having complied with regulations 10(1)–(5) of the Principal Regulations, it pays the amount of rent otherwise required to be paid under the eligible lease during the relevant period, the tenant’s right not to be evicted under regulations 9(2) and 9(3) of the Principal Regulations, as properly construed, also subsists. To have the benefit of one of the rights conferred by the Principal Regulations — regulation 9(1) — by having complied with regulations 10(1)–(5) of the Principal Regulations, and not to also have the benefit of the concomitant rights granted by regulations 9(2) and 9(3) of the Principal regulations (both of which must be taken to refer to regulations 10(1)–(5) of the Principal Regulations), might be thought to be illogical.

117.     Against this, however, it may be contended that given the expressed retrospective nature of the Principal Regulations’ Amendments, the seemingly broader rights granted in favour of a landlord by regulations 9(2) and 9(3) of the Principal Regulations’ Amendments to evict a tenant or to otherwise re-enter or recover premises (that is to say, a landlord is expressly entitled to evict or recover premises for reasons other than the “non-payment of rent or outgoings”) enure to the benefit of the landlord from 29 March 2020.  

118.     I have concluded that, on the basis of the legislation and authorities, there is a serious question for hearing as to the proposition that the right accruing to the tenant under regulations 9(2)–(3) of the Principal Regulations, however that right is to be construed, subsists in favour of the tenant, by reason of the tenant having complied with regulations 10(1) to (5) the Principal Regulations, and notwithstanding the promulgation of the Principal Regulations’ Amendments by which regulations 9(2)–(3) of the Principal Regulations were amended.

It appears that the tenant did not make an application for rent relief for the period 30 September 2020 to 31 December 2020, or for the period 1 January 2021 to 28 March 2021, so the decision only considers whether the moratorium created by the Principal Regulations survived the amendment of the Regulations and the Tribunal was not required to consider any further issues about retrospectivity of the CTRS Regulations or their extended application.

Sub-regs 9(2) and (3) were amended from 29 September 2020 to expressly limit the moratorium to the prevention of re-entry for non-payment of rent or outgoings, so the tenant’s argument does not arise after those amendments.

Secondly, the Tribunal held that the moratorium on re-entry in the Principal Regulations only applied to rent arrears and did not prevent re-entry for any other alleged default.

Reg 9 of the CTRS Regs states that:

9            Non-payment of rent during relevant period

(1)          A tenant under an eligible lease is not in breach of the eligible lease if they do not pay the amount of rent required to be paid under the eligible lease during the relevant period and only if they—

(a)          comply with regulation 10(1) to (5) during the relevant period; or


A tenant under an eligible lease will also need to comply with regulation 10(1) to (5) during the relevant period every time they request rent relief in the circumstances provided for under regulation 11.

(b)          during the relevant period, pay an amount of rent in accordance with—

(i)           any variation to the eligible lease mentioned in regulation 10(6)(a); or

(ii)          any other agreement mentioned in regulation 10(6)(b).


An eligible lease has effect subject to subregulation (1)—see section 17(1) of the Act.

(2)          A landlord under an eligible lease must not evict or attempt to evict a tenant under the eligible lease to whom subregulation (1) applies.

Penalty: 20 penalty units.

(3)          A landlord under an eligible lease must not re‑enter or otherwise recover, or attempt to re‑enter or otherwise recover, the premises under an eligible lease if the tenant under the eligible lease is a tenant to whom subregulation (1) applies.

Penalty: 20 penalty units.

The tenant argued that the literal meaning of sub-reg 9(2) and (3) means that a landlord is not entitled to terminate a lease for any reason, provided that the lease satisfies sub-reg 9(1).

The Tribunal rejected that construction of the lease as unarguable and provided the following reasons (emphasis added, footnote from original):

123.     The only act by a tenant of an eligible lease which would otherwise be a breach of the eligible lease, but in respect of which the tenant is expressly given statutory protection by regulation 9(1) is, therefore, the non-paying of rent otherwise required under an eligible lease. In my view, it follows that the preventing of a landlord from evicting a tenant or re-entering premises imposed by regulations 9(2) and 9(3) respectively extends only to the circumstance that a tenant has not paid the amount of rent required under an eligible lease. The proposition that the effect of regulation 9(2) and (3) is to extend, by implication, a statutory protection to a tenant against eviction and re-entry respectively in respect of all breaches of an eligible lease, whether it is in respect of the non-paying of rent or otherwise, is not in my view reasonably arguable. 

124.     I also consider that a literal construction of regulations 9(2) and (3), without reading it in the context to which I have referred would, in the case of a tenant of an eligible lease who, having complied with regulation 9(1) of the Principal Regulations, would obtain a statutory right not to be evicted for any other breach, no matter how gross or repugnant. I am of the view that a literal construction of regulations 9(2) and (3), as propounded by the tenant, would be modified so as to avoid that absurdity.[3]

125.     It follows, from my preferred construction of these provisions, that where a tenant pays the rent and outgoings required to be paid under an agreement pursuant to regulation 10(6)(b) of the Principal Regulations, but otherwise breaches a term of the lease for which eviction or re-entry is prescribed under the lease or allowed at law, there is no serious question to be tried as to whether regulations 9(2) or 9(3) of the Principal Regulations prevent eviction or re-entry consequent upon such breach. 

Thirdly, the Tribunal held that the tenant established a triable issue over whether the works alleged to be in breach of planning laws were the result of the tenant’s fitout or landlord’s works and that the landlord’s default notice failed to describe the alleged breaches with sufficient particularity.  

It is beyond the scope of this post to detail those arguments, but interested readers are referred to paragraphs [126] to [135] of the judgment.

Fourthly, the Tribunal held that the tenant had established an arguable case that the landlord was engaging in unconscionable conduct, stating that:

150.     It is plain from the evidence, therefore, that between 24 September 2020, when the landlord agreed in principle to the tenant adopting a course which may have achieved compliance with the Building Order and 14 October 2020, when the landlord serving the default notices, the landlord’s position towards the tenant had changed.

151.     The tenant contends that there is a serious question for hearing whether the real reason that the landlord wished to forfeit the lease was not primarily because of the reasons expressed in the default notices, but because it wished to rid itself of a tenant with whom Covid-19 rent relief negotiations had stalled, and because it latterly decided that it wished to repair the roof of the premises without giving the requisite notice six months’ notice under the lease. Given also the obligation on the landlord, implied at law, to do all things necessary on its part to enable the tenant to have the benefit of the lease,[4] I have concluded that there is a serious question to be tried whether such circumstances, if proved at the final hearing, is conduct that amounts to unconscionable conduct within the meaning of section 77 of the Retail Leases Act 2003, and within the meaning adopted by the Court of Appeal in Jams 2 Pty Ltd.

Summary.  The take-home points about the CTRS from this case are that the Tribunal held that:

  1. the prohibitions on re-entry in regs 9(2) and (3) of the Principal Regulations (ie the CTRS Regulations that were in force between 29 March 2020 and 29 September 2020) only prevent re-entry for non-payment of rent and do not prevent re-entry for other breaches;  and
  2. it is arguable that the moratorium on re-entry that accrued under the Principal Regulations is an accrued right that survives amendment of those regulations.

[1]        See Pearce and Geddes, Statutory Interpretation in Australia (LexisNexis Butterworths, 8th ed, 2014) at [10.11].

[2]            See observations of Senior Member Forde’s in Filomeno Nominees Pty Ltd v Crown Group Pty Ltd (Building and Property) [2021] VCAT 81 at [30].

[3]        See Grey v Pearson (1857) 6 HLC 61 at 106; 10 ER 1216 at 1234 and Australian authorities referred to in Pearce and Geddes, Statutory Interpretation in Australia (Lexis Nexis Butterworths, 8th ed, 2014) at [2.4].

[4]            See Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd (1997) 144 CLR 596 at 602, 606–7, and cases referred to in Cheshire and Fifoot Law of Contract, (LexisNexis Butterworths, 11th ed (Australian), 2017) at [10.41].