FAR EAST HARBOUR TOWN PTY LTD and PHONE XPERTS PTY LTD

[2023] WASAT 51

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL

ACT: COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 (WA)

CITATION:   FAR EAST HARBOUR TOWN PTY LTD and PHONE XPERTS PTY LTD  [2023] WASAT 51

MEMBER:   DR B DE VILLIERS, MEMBER

HEARD:   DETERMINED ON THE DOCUMENTS

DELIVERED          :   3 JULY 2023

FILE NO/S:   CC 905 of 2023

BETWEEN:   FAR EAST HARBOUR TOWN PTY LTD

Applicant

AND

PHONE XPERTS PTY LTD

Respondent

Catchwords:

Retail commercial tenancy - Requirements for special circumstance for early termination of lease - Damage and Destruction

Legislation:

Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), s 13(6)(a), s 13(6)(b), s 13(6)(c), s 13(6)(da), s 13(6)(d), s 13(7)

Result:

Application dismissed

Representation:

Counsel:

Applicant	:	Ms M Pringle
Respondent	:	In Person

Solicitors:

Applicant	:	Squire Patton Boggs
Respondent	:	N/A

Case(s) referred to in decision(s):

Synicast Pty Ltd and Showroom X Pty Ltd [2023] WASAT 47

REASONS FOR DECISION OF THE TRIBUNAL:

Background

1. The applicant, who is the landlord of a retail commercial tenancy, has requested approval for a clause to be added to the lease to allow the landlord to terminate the lease in a period shorter than the statutory guaranteed 5 years due to damage and destruction of part of the whole of the premises (clause 42).  The premises is located at Kiosk No. K004 in the centre known as Watertown Brand Outlet Centre.

2. Section 13(7) of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (CTRSA Act) represents a departure from the tenant's right to the option of extending the term of the lease to a period of up to 5 years. The option for an extended period is an important and valuable right to the tenant. This importance is recognised by the CTRSA Act since it prohibits the landlord from terminating the lease short of that 5 year term, save in the limited circumstances set out in s 13(6)(a)-(d) of the CTRSA Act. One of those circumstances is where the Tribunal gives approval on a ground for the termination of a lease under s 13(7) of the CTRSA Act. (Synicast Pty Ltd and Showroom X Pty Ltd [2023] WASAT 47 (Synicast Pty Ltd at [21])

3. The Tribunal is now called upon to consider the special circumstances identified by the landlord, the response, if any, by the tenant, and to determine whether the approval is granted.  The discretion of the Tribunal is wide, which means the Tribunal can take into account the totality of circumstances to assess whether they meet the threshold of 'special circumstances'.  (Synicast Pty Ltd at [27], [54] and [62]).  It is noted that the tenant has consented to the proposed variations.  The matter is determined on the documents.

Facts and consideration

1. The relevant facts giving rise to the decision are as follows:

   1)The application was lodged on 21 June 2023.

   2)The landlord had declared in the application that it had informed the tenant of its intention to lodge the application.  The tenant has consented to the proposed variations.

   3)The landlord seeks approval of clause 42 for reasons that a special circumstance may in future arise and in anticipation, the proposed variation is submitted to the Tribunal for approval pursuant to sub-section 13(7) of the CTRSA Act.

   4)The reason why the landlord says a special circumstance exists or may arise in future is that in the event that the premises is damaged or destroyed, an early termination of the lease should be authorised.

   5)I now proceed to determine the application on the documents.

   6)I am not satisfied that a special circumstance exists for approval of clause 42. The reason for this finding is that I am not satisfied that special circumstances as required in s 13(7) of the CTRSA Act 'exist'. The Tribunal does not have the power to approve clause 42 for early termination due to unremedied damage or destruction if those conditions do not already exist. It seems the variation is only sought in anticipation of the potential of damage or destruction (Synicast Pty Ltd at [30]).

Orders

The Tribunal orders:

1.On the application in respect of a retail shop lease between the parties relating to Kiosk No. K004 in the centre known as Watertown Brand Outlet Centre, it is ordered that the application for the approval of the inclusion of clause 42 in the lease is dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.

DR B DEVILLIERS, MEMBER

3 JULY 2023