Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Progressive Restaurants Australia Pty Ltd v Chase Byron Developments Pty Ltd [2013] NSWADT 163 Hearing dates: 4 July 2013 Decision date: 04 July 2013 Jurisdiction: Retail Leases Division Before: P H Molony, Judicial Member Decision: I appoint Mr Drew Roberts as the Specialist Retail Valuer. Mr Roberts has indicated his fees to be a total of $4,800 plus GST. Catchwords: Appointment of Specialist Retail Valuer Legislation Cited: Retail Leases Act 1994 Category: Principal judgment Parties: Progressive Restaurants Australia Pty Ltd (Applicant) Chase Byron Developments Pty Ltd (Respondent) Representation: Heydons (Applicant) Chase Byron Developments Pty Ltd (Respondent in person) File Number(s): 135070 reasons for decision 1On 4 July 2013 the Tribunal appointed Mr Drew Roberts as the Specialist Retail Valuer with respect to premises at Shop 4/1 Byron Street, Byron Bay (the premises). These are written reasons for that decision, which were requested by the applicant. 2The applicant for appointment of a specialist retail valuer was made by Progressive Restaurants Australia Pty Ltd, the lessee of the premise under a registered lease, commencing 1 May 2009, from Chase Byron Developments Pty Ltd as lessor. The initial term of the lease was for 5 years, with an option for a further period of 5 years. 3The application was made with respect to a current market rent review under the lease. 4Section 19 of the Retail Leases Act 1994 provides - (1) A retail shop lease that provides for rent to be changed to current market rent is taken to include provision to the following effect: (a) The current market rent is the rent that would reasonably be expected to be paid for the shop, as between a willing lessor and a willing lessee in an arm's length transaction (where the parties are each acting knowledgeably, prudently and without compulsion), determined on an effective rent basis, having regard to the following matters: (i) the provisions of the lease, (ii) the rent that would reasonably be expected to be paid for the shop if it were unoccupied and offered for renting for the same or a substantially similar use to which the shop may be put under the lease, (iii) the gross rent, less the lessor's outgoings payable by the lessee, (iv) rent concessions and other benefits that are frequently or generally offered to prospective lessees of unoccupied retail shops. The current market rent is not to take into account the value of goodwill created by the lessee's occupation or the value of the lessee's fixtures and fittings on the retail shop premises. (b) If the lessor and the lessee do not agree as to what the actual amount of that rent is to be, the amount of the rent is to be determined by valuation carried out by a specialist retail valuer appointed by agreement of the parties to the lease, or failing agreement, by the Tribunal. (c) The matters set out in paragraph (a) are to be taken into account by a specialist retail valuer appointed under paragraph (b) in determining the amount of the rent. (d) The lessor must, not later than 14 days after being requested to do so by a specialist retail valuer appointed under paragraph (b), supply the valuer with information (where reasonably available to the lessor) requested in a list provided by the valuer to assist the valuer to determine the current market value, including the following information about leases for comparable retail shops in the same building or retail shopping centre: (i) current rental for each lease, (ii) rent free periods or any other form of incentive, (iii) recent or proposed variations of any lease, (iv) outgoings for each lease, and including any other information prescribed by the regulations. (e) A valuation for the purposes of paragraph (b) is to be in writing, to contain detailed reasons for the specialist retail valuer's determination and to specify the matters to which the valuer had regard for the purposes of making his or her determination. (f) The parties to the lease are to pay the costs of a valuation by a specialist retail valuer appointed under paragraph (b) in equal shares. Note. The procedure provided by this section can be avoided if the parties can come to an agreement as to what the rent is to be. (1A) A party to a lease may apply to the Tribunal for the appointment of a specialist retail valuer for the purposes of subsection (1) (b). (1B) A party to a lease may make written submissions to a specialist retail valuer to assist in the valuer's consideration of the valuation, and the valuer must consider any such written submissions. (2) A specialist retail valuer must make a valuation of a current market rent for the purposes referred to in this section not later than 1 month after receiving the information referred to in subsection (1) (d). (3) A specialist retail valuer may apply to the Tribunal under Part 8 for an order that a lessor comply with a request referred to in subsection (1) (d) to supply relevant information about leases for retail shops situated in the same building or retail shopping centre to assist the valuer to determine the rent. (4) The reasons and matters included in a valuation as referred to in subsection (1) (e) must not be set out in a way that discloses information identifying other leases or parties to other leases or relating to the business of parties to other leases. This subsection does not apply to leases between the parties to the lease for which the valuation is made or to leases whose parties consent to the disclosure of the information. 5The Tribunal has published a Guideline with respect to the Appointment of Specialist Retail Valuers which outlines its procedures when dealing with such applications. With respect to valuers who can be appointed paragraph 4 of the Guideline provides - 4. The valuers who can be appointed 4.1 The Tribunal can only appoint valuers who appear on the lists maintained by the Presidents of the Australian Property Institute (API) and the Real Estate Institute (REI). 4.2 The lists can be viewed at: http://www.reinsw.com.au/Specialist-retail-valuers-list/default.aspx and http://www.nsw.api.org.au/menuitem/property-professionals/-specialist-retail-valuers. 6The Appointment of Specialist Retail Valuers Guideline also sets out the procedure of the Tribunal following the filing of an application for appointment of a specialist retail valuer. It provides - 7. Procedure after filing of application 7.1 The registry will send a registration letter to the applicant and the respondent advising of the date when the Tribunal will appoint the valuer ("the appointment date"). 7.2 The letter to the respondent will also enclose a copy of the application and the form "Notice of Objection to Valuers". 7.3 If the respondent has an objection to any of the valuers on the API and REI lists they must complete the objection form and return to it to the Tribunal no later than 7 business days from the date on the registration letter. The form should be emailed to the Tribunal at srv_adt@agd.nsw.gov.au. 7.4 A Judicial Member will nominate between 5 and 10 valuers from the API and REI lists taking into account any objections by the parties. The registry will email the application form to the nominated valuers and ask them to advise the registry if they have: ·no conflict of interest, ·the expertise and experience required, ·availability to conduct the valuation within 6 weeks of the appointment. 7.5 Valuers are to reply within 3 business days from the date of the email to srv_adt@agd.nsw.gov.au including in the subject line of the email the appointment date and parties names. They must advise what their fee for undertaking the valuation will be. The fee will be a factor taken into account when the Tribunal appoints a valuer. 7.6 Valuers who do not meet the criteria are not required to respond. 8. The appointment process 8.1 A Judicial Member will select a valuer/s from those who respond. 8.2 The Tribunal will advise the parties and the valuer/s appointed of the decision and send a copy of the lease to the valuer/s. 7In this case the lessee advised of the names of three firms of retail valuers which it objected to the appointment of in its application. On 6 June the lessor filed notices objecting to the appointment of named valuers. 8On 20 June 2013 the matter came before Judicial Member Rickards. He nominated four valuers from the API and REI lists, who identified themselves as practicing in the region where the premises are located. They were each advised of their nomination and asked to reply in accordance with paragraph 7.4 of the Appointment of Specialist Retail Valuers Guideline. 9No replies were received. 10The matter next came before Deputy President Higgins on 27 June 2013 when she nominated seven different valuers. They were each advised of their nomination and asked to reply in accordance with paragraph 7.4 of the Appointment of Specialist Retail Valuers Guideline. Only three did so. 11The matter next came before me on 4 July 2013. Of the three responses, one indicated that the valuer was unable to complete the work within the time required. In each of to the remaining two responses the valuers stated that they were available to undertake the valuation, had no conflict of interest, had the expertise and experience required, and could complete the valuation in time. 12One valuer, who was based in suburban Sydney, quoted $5,160 plus GST. The other valuer, who had a Newcastle address, quoted "$4,800 plus GST being inclusive of travel and accommodation expenses, but exclusive of any required property searches." 13I determined to appoint the valuer with the Newcastle address, who is Mr Drew Roberts. I did so because his quote was the cheapest; it included travel and accommodation expenses which were not referred to in the other quote; and, because Mr Roberts is located closer to the premises than the other valuer. He was qualified and available to undertake the valuation within time, had no conflict of interest, and had not been objected to be either party. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 23 July 2013