A 'retail tenancy
dispute' is a dispute concerning the liabilities, or
obligations of a party (or former party) to a retail shop lease or
former lease. Without limiting the generality of this
definition, it may include a dispute surrounding a security bond,
unpaid rent,
make-good costs and/or a loss arising from early termination or
the abandonment of
the lease. It is important to note that the definition
does not include disputes relating to the value of
current
market rent payable under a retail shop lease, which is dealt
with by
section 31 of the Retail Leases Act 1994 ("the
Act").
Unless a
retail lease is specifically excluded from the operation of the
Act, a dispute arising in relation to the lease is affected by
section 68, which stipulates:
- A retail tenancy dispute or other dispute or matter referred to in section 65 (1) (a1) may not be the subject of proceedings before any court unless and until the Registrar has certified in writing that mediation under this Part has failed to resolve the dispute or matter or the court is otherwise satisfied that mediation under this Part is unlikely to resolve the dispute or matter.
- The Registrar must certify that mediation under this Part has failed to resolve a retail tenancy dispute or other dispute or matter referred to in section 65 (1) (a1) if the Registrar is satisfied that any one or more of the parties to the dispute or matter has refused to take part in or has withdrawn from mediation of the dispute or matter.
- This section does not apply to proceedings before a court for an order in the nature of an injunction.
- This section does not operate to affect the validity of any decision made by a court.
Whilst, at first glance,
section 68 may suggest that mediation is a compulsory step
prior to the commencement or continuation of any court proceedings
concerning a
retail tenancy dispute, the court has determined that it will
not necessarily block proceedings.
In determining this issue in
Fordham Laboratories Pty Limited v Sor & Anor [2011] NSWSC
706 (8 July 2011), the Supreme Court of
NSW said that the requirement to mediate is not a condition
precedent to the commencement or continuation of proceedings, but
that the court may not proceed to hear and determine the
dispute unless satisfied that mediation under
section 68 is unlikely to resolve the dispute.
If the court is not satisfied of this fact, then at worst, the
claim in the proceedings may be liable to be struck out - or at
best, the proceedings may be put on hold whilst the dispute is
referred to mediation before the Registrar of Retail Tenancy
Disputes (or the Registrar's delegate). Either way, it
can be a time consuming and costly mistake not to mediate a dispute
where mediation is appropriate and does have a reasonable chance of
resolving the issue at hand.
Not all
commercial leases are
retail leases, and not all leases of premises for retail use
are governed by
the Act. Subject to exclusions set out in
sections 5,
6,
6A and
6B of the Act, a '
retail lease' is any agreement under which a person grants
to another person for value a right of occupation of premises where
the purpose of the use of the premises is as a retail
shop:
(a)
whether or not the right is a right of exclusive occupation;
(b) whether the agreement is express or implied; and
(c) whether the agreement is oral or in writing, or partly oral and
partly in writing.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.