The Retail Leases Act 2003 and Council owned premises (August 2008)

The Determination

The Minister for Small Business has made a determination published in the Victoria Government Gazette No. S 209 on 24 July 2008 (the Determination) which comes into effect on 1 August 2008.

The Determination has significant implications for councils as it excludes the application of the Retail Leases Act 2003 (Act) to certain leases of council owned premises entered into on or after 1 August 2008.

Purposes excluded from "retail premises"

The Determination provides that leases of council owned premises will not constitute "retail premises" if the premises are leased "wholly or predominantly" for any of the following:

  • public or municipal purposes;
  • charitable purposes;
  • residence or education and training of a religious minister or persons to be a religious minister;
  • as a club, or memorial, for persons who served in the First or Second World War or in any other war, for the Returned Services League of Australia, for the Air Force Association (Victoria Division) or for the purposes of the Australian Legion of Ex-Servicemen and Women (Victorian Branch); or
  • to a body, corporate or unincorporate, that exists for the purposes of providing or promoting community, cultural, sporting, recreational or similar facilities, activities or objectives, and that applies its profits in promoting its objects and prohibits the payment of any dividend or amount to its members.

The "wholly or predominantly" test

The phrase "wholly or predominantly" has been judicially considered by the Victorian Civil and Administrative Tribunal (VCAT) in the decision of Elmer v Minute Wit Enterprises Pty Ltd [2002] VCAT where the Tribunal commented:

... no single factor by itself is determinative, that is, one cannot just look at a spatial feature ... One must take all [relevant] matters as a whole and come to a factual conclusion of whether the premises described in the lease are used, or are to be used, "wholly or predominantly" for...

[paragraph 29]

Accordingly, a lease of council premises will not be a "retail premises" lease if under the lease, when considered in its entirety, the premises are to be used "wholly or predominantly" for any one of the identified purposes.

Certificate requirements

Similar to the other ministerial determinations that exclude certain types of leases from the operation of the Act, a certificate signed by the Small Business Commissioner shall constitute evidence that a lease is one to which the Determination applies.

Further information

A copy of the Government Gazette outlining the Determination is available online at www.sbc.vic.gov.au Maddocks Property Team for Local Government For further information regarding any of the articles in this Update, please contact a member of our team below:

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