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Online business and retail shop leasing – is it a retail shop?

March 26th, 2019

If a tenant conducts an online retail business, but uses premises predominantly for producing or storing goods, is it a retail shop?  The Victorian Civil and Administrative Tribunal (“VCAT”) recently considered this question.

The Retail Shop Leases Act in Queensland and its equivalent across other states in Australia (“Retail Shop Legislation”) imposes additional tenant protections in leases of retail shop premises.  These additional protections do not apply to premises that are not considered retail shops under the legislation.  The concept of what is a retail shop is not always a straightforward determination to make, as illustrated in the decision of VCAT in Bulk Powders Pty Ltd v Seicon Pty Ltd (Building and Property).

Bulk Powders Pty Ltd v Seicon Pty Ltd (Building and Property) [2018] VCAT 2000

Bulk Powders Pty Ltd (the tenant) leased premises in an industrial area in Victoria where it developed and produced sports nutrition and supplement products.  While the tenant sold the items it produced as a retail business, the sales were mostly online, except in limited circumstances where some customers could collect products by appointment.  The tenant sought a declaration from VCAT that the premises was a retail shop.  The reason the tenant did this was that the lease included outgoings which would not be permitted to be recovered by the landlord if the premises were a retail shop.

The Retail Shop Legislation defines retail premises as premises that are “used wholly or predominantly for the sale or hire of goods by retail or the retail provision of services”.

Upon reviewing the law on this point, VCAT considered that to be retail premises, it was necessary that the premises have a retail characteristic of being open to the public, which in this instance, it was not.  The premises were used for predominantly production and storage of products and even though those products were sold online, that did not make the premises retail premises.

With so many businesses being conducted online today, this is an important clarification for both landlords and tenants about when the Retail Shop Legislation will apply to a leasing arrangement.  The consequences of the Retail Shop Leases Act applying to a lease are significant, for example, as illustrated in this case, the inability of the landlord to recover certain types of outgoings and charges.  There are also further disclosure obligations on the landlord that, if not complied with, can give the tenant extensive rights to terminate a lease.  This decision also goes to show that what does constitute a retail shop is not always a straightforward answer and there are a number of considerations in making a determination about this.

You can access the full decision of VCAT here.

Our team at Miller Harris Lawyers has extensive experience in commercial and retail leasing in Cairns and surrounding areas.  We would be happy to assist you with all of your leasing requirements.  Please contact our office on 07 4036 9700.

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Family Law Judges are not mediators, or are they?

March 7th, 2019

In another surprising development in the ever-changing landscape of Australian family law, Judges in the Federal Circuit Court of Australia can now act in certain cases, as mediators.  “Judicial Mediations” as they are called, are an entirely new service now being provided by Judges of the Federal Circuit Court of Australia; Judges who, it is well-documented, are already overburdened by huge case loads.

The rules surrounding Judicial Mediations are set out in Practice Direction No. 1 of 2019 which commenced on 1 January 2019 and is available on the Federal Circuit Court website.

A brief summary of the main rules of Judicial Mediations is as follows:

  • a party to a case before the Federal Circuit Court may make an oral or written application for Judicial Mediation;
  • the “docket Judge” who the parties ordinarily appear before, determines, according to certain criteria, whether the case is suitable for Judicial Mediation;
  • in considering whether a matter is suitable the docket Judge will consider a list of suitable matters provided for in the practice direction; however he or she may determine that another matter not provided for in that list is still suitable;
  • suitable matters include:
    • those where both parties are legally represented;
    • those where one or both parties are self-represented and the docket Judge determines the matter is suitable for judicial mediation;
    • property disputes;
    • parenting disputes where there is no  allegation of  serious risk and/or family violence;
    • appropriate child support matters;
    • compliance with orders for a prior unsuccessful private mediation; and
    • a risk that the costs and time of the trial will be disproportionate to the subject matter of the dispute;
  • it is expected that all mediation alternatives (including private mediation with a family dispute resolution practitioner) will be exhausted prior to a Judicial Mediation;
  • if ordered, a new Judge will be appointed as the Judicial Mediator so the case is not mediated by the docket Judge or the trial Judge (who is usually one and the same);
  • significant preparation is required for Judicial Mediation, similar to that required for a trial; and
  • all parties and any legal representatives must attend the Judicial Mediation.

How frequently Judicial Mediations are ordered and how effective they are, remains to be seen.  It is hoped that this new service will not significantly increase the already large case loads being handled by Federal Circuit Court Judges, and in the process increase waiting times being experienced in the courts.

For more information about Judicial Mediations or any other family law issues, feel free to contact Julie Hodge, family lawyer & Senior Associate on 07 4036 9706.

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