SCENTRE CUSTODIAN PTY LIMITED and THE BOOK CENTRE GROUP PTY LTD

[2023] WASAT 60

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL

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

CITATION:   SCENTRE CUSTODIAN PTY LIMITED and THE BOOK CENTRE GROUP PTY LTD [2023] WASAT 60

MEMBER:   MR K BALES, SESSIONAL MEMBER

HEARD:   DETERMINED ON THE DOCUMENTS

DELIVERED          :   6 JULY 2023

FILE NO/S:   CC 907 of 2023

BETWEEN:   SCENTRE CUSTODIAN PTY LIMITED

First Applicant

DEXUS WHOLESALE PROPERTY LIMITED

Second Applicant

AND

THE BOOK CENTRE GROUP PTY LTD

Respondent

Catchwords:

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

Legislation:

Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), s 13(6), s 13(6)(a), s 13(6)(b), s 13(6)c, s 13(6)(d), s 13(6)(da), s 13(7)
Commercial Tenancy (Retail Shops) Agreements Regulations 1985 (WA), Sch 1

Result:

Application dismissed

Category:    B

Representation:

Counsel:

First Applicant	:	N/A
Second Applicant	:	N/A
Respondent	:	N/A

Solicitors:

First Applicant	:	Watts Leases
Second Applicant	:	Watts Leases
Respondent	:	N/A

Case referred to in decision:

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

REASONS FOR DECISION OF THE TRIBUNAL:

Background:

1. The landlord of a retail commercial tenancy has requested approval for clauses to be added to allow the landlord to terminate the lease in a period shorter than the statutory guaranteed 5 years due to the existence of special circumstances. Section 13(7) of the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) (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])

2. 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]).

3. 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 22 June 2023.

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

   3.The landlord seeks approval of clauses 15.1(b) and 22.1 for reasons that special circumstances exist pursuant to sub‑section 13(7) of the CTRSA Act.

   4.The reason the landlord says a special circumstance exists is that, in future, the tenant may be in default due to insolvency and that damage might occur which remains unremedied by the landlord for longer than three months.

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

   6.I am not satisfied that a special circumstance exists for approval of clauses 15.1(b) and 22.1.

   7.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 because:

   (a) the Tribunal does not have the power to approve clause 22.1 for early termination which is the subject of s 13(6)(da) of the CTRSA Act and Sch 1, Item 1 of the Commercial Tenancy (Retail Shops) Agreements Regulations 1985 (WA);

   (b) the Tribunal does not have the power to approve clause 22.1 for early termination by reason of default by the tenant under s 13(6) of the CTRSA Act (Synicast Pty Ltd at [59]);

   (c) the Tribunal does not have the power to approve clause 15.1(b) for early termination since the landlord has not shown that an adequate ground exists for an early termination (Synicast Pty Ltd at [54]); or

   (d) the Tribunal does not have the power to approve clause 15.1(b) for early termination since I am not satisfied that it has been shown that special conditions actually exist (Synicast Pty Ltd at [30]).

Orders

1. The Tribunal orders:

   1.On the application in respect of a retail shop lease between the parties relating to Shop 33/34 Westfield Booragoon Shopping Centre, it is ordered that the application for the approval of the inclusion of clauses 15.1(b) and 22.1 in the lease is dismissed.

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

MR K Bales, SESSIONAL MEMBER

6 JULY 2023