Hunt v Casaran Pty Ltd [2012] NSWADT 193

Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Hunt v Casaran Pty Ltd [2012] NSWADT 193 Hearing dates: 29 February 2012 Decision date: 19 September 2012 Jurisdiction: Retail Leases Division Before: D R Bluth, Judicial Member Decision: 1. On file number 115190 declare pursuant to Section 72(1)(f)(iii) of the Retail Leases Act 1994, that the parties are not bound by the valuation of David Bird of Kohler Bird, dated 29 March 2011 in respect of Shop 22, Bangor Shopping Centre as it is not a valuation for the purposes of Section 31 of that Act. 2. On file number 15131, declare that the interim appointment of Specialist Retail Valuer, Richard Wood is confirmed. 3. The Respondent to pay the costs of the Applicant. Catchwords: Retail leases - appointment of specialist retail valuer Legislation Cited: Retail Leases Act 1994 Administrative Decisions Tribunal Act 1997 Cases Cited: Adwell Holdings v Bourne (2007) NSWSC 17, (2007) NSW Conv R 56188 Perri v Exego Pty Limited [2009] NSWADT 170 Richardson v Lockevo Pty Ltd [2010] NSWADT 305 Eastpoint Shopping Village Pty Ltd v Grayson Pty Ltd [2011] NSWADT 68 Category: Principal judgment Parties: Robert Hunt, Susan Hunt and Stephen Hunt (Applicants) Casaran Pty Ltd (Respondent) File Number(s): 115131 and 115190

REASONS FOR DECISION 1Casaran Pty Ltd (the Respondent) leased retail shop premises shop 22 Bangor Shopping Centre (the Premises) originally to the Lessee named in the Lease under a registered Lease which commenced on 12 March 2009 until 11 March 2011 (the Lease). The Lease contained an option for renewal for five years from 12 March 2011. 2The premises were to be used as a Licensed Post Office. The commencing rent was $16,363.64 per annum plus GST. The Lease was assigned to Robert Hunt, Susan Hunt and Stephen Hunt, (the Applicants). 3The lease made provision for annual CPI increases of rent. On exercise of the option, if the rent payable for the first year of the new lease was not agreed between the parties then pursuant to Clause 32(a) of the Lease the rent was to be the then current market rent determined in accordance with Clause 37. 4Clause 37(a) of the Lease provides: "The current market rent of the demised premises is the rent that would be reasonably be expected to be paid for the property, determined on an effective rent basis, having regard to the following matters: (i) the provisions of this lease; (ii) the rent that would reasonably be expected to be paid for the property if it were unoccupied and offered for renting for the same or substantially similar use to which the property may be put under this lease; (iii) the gross rent, less the landlords outgoing payable by the tenant; (iv) rent concessions and other benefits that are frequently or generally offered to prospective tenants of unoccupied retail shops. The current market rent is not to take into account the value of goodwill created by the lessee's occupation the value of the lessee's fixtures and fittings on the demised premises." 5When the time came for the rent to be reviewed on a current market rent basis the parties were unable to agree as to a new rent, and a valuer Mr David Bird of Kohler Bird was appointed to conduct the valuation to determine the rent (the Valuation). 6Mr Bird prepared a rental valuation, dated 29 March 2011, which determined that the current market rental of the premises at 28 March 2011 was $23,030 gross per annum plus GST. 7On 20 September 2011 the Applicant filed in No 115131 an Application for Original Decision seeking the appointment of a Specialist Retail Valuer pursuant to s31 of the Retail Leases Act [RLA]. On 3 November 2011 the Tribunal made an Interim Notice of Appointment of Richard Wood, Specialist Retail Valuer, subject to objections. The Tribunal understands that the Application was made on the basis that the valuation of Mr Bird did not comply with the RLA in the opinion of the Applicant. The Respondent made an objection. 8On 21 December 2011 the Applicants filed a Retail Tenancy Claim in which they sought a declaration that the Valuation was not a valuation for the purposes of s 19 of the RLA (query whether the application should have been for the purposes of s 31). The two applications were listed for hearing before me on 29 February 2012. At the conclusion of the hearing I reserved my decision. It was agreed that should I find that the Valuation was a valuation of current market rent under s 31, then the dispute between the parties came to an end. However, if I found that the Valuation was not a valuation of current market rent for the purposes of s 31, then there was agreement that I should make orders confirming the appointment of the new valuer, Richard Wood to perform a valuation under s 31.