Monday, 22 August 2011

What do I need to know about VCAT’s Exclusive Jurisdiction over Retail Leases?

For 25 years[1], the jurisdiction of the courts of Victoria has been limited in relation to retail leases disputes under the Retail Leases Act 2003. VCAT currently has exclusive jurisdiction over these disputes (with minor exceptions, for example relief against forfeiture, and proceedings for recovery of rent).

Twice already in 2011, I have come across proceedings issued in the Magistrates Court of Victoria that seek orders that relate to these disputes. In the first case, although it had no jurisdiction to do so, the
Magistrates Court
had actually granted injunctive relief against the landlords, preventing them from taking possession of the retail premises. This is despite the fact that the tenants had ceased to pay the rent!

The legislation is the Retail Leases Act 2003. The relevant provisions are sections 81 and 89.  

In the Supreme Court of Victoria decision of A.B.C. Developmental Learning Centres Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed) (ACN 010 788 502) v B.M. Children’s Services Pty Ltd (ACN 105 995 006) and others, [2010] VSC 262, Pagone J held (at paragraph 5):
“5 … the jurisdiction of this Court was expressly removed by s 89(4) of the Act ... In my view the jurisdiction expressly excluded by the legislature is not reconferred, re-enlivened or reactivated by a litigant bringing an action which is within jurisdiction. … the only proceeding which may be brought by the plaintiff in this Court is an application for relief against forfeiture. To the extent that the plaintiff’s claim is wider than that it must be dismissed. I … [note] the extra judicial views expressed to like effect about the decision in Xiao by Dr Croft (as his Honour then was) and Mr Hay in Croft and Hay, Retail Leases Victoria.”

This is a friendly reminder to solicitors in commercial practice in Victoria to bear these matters in mind when attempting to collect rent from recalcitrant retail tenants. 

W G Stark  
Hayden Starke Chambers

[1] Legislation dating back to the Retail Tenancies Act, 1986 removed the jurisdiction of the courts of Victoria over retail premises leases.