Centuria Property Services Pty Ltd v Daniel Lee and Blooms the Chemist [2015] NSWCATCD 66

Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Centuria Property Services Pty Ltd v Daniel Lee and Blooms the Chemist [2015] NSWCATCD 66 Hearing dates: 7 April 2015 Decision date: 16 July 2015 Jurisdiction: Consumer and Commercial Division Before: D Bluth, Senior Member Decision: The application for the Joint Report to be set aside under s 32A(12) of the Act is dismissed. Catchwords: Retail Leases Act 1994 s 32 A (12) manifest error and s 72 AB appointment of specialist retail valuer Cases Cited: Great Tastes of Australia Pty Ltd v Shorty Holdings Pty Ltd [2006] NSWADT 253

Inspire International Holdings Pty Ltd v Heriot Pty Ltd [2013] NSWADT 48

Kokkinidis v Zaharpoulos [2011] NSWADT 153 Texts Cited: Nil Category: Principal judgment Parties: Centuria Property Services Pty Ltd (Applicants) v Daniel Lee and Blooms the Chemist (Respondent) Representation: Solicitors:

Self: (Applicant) CBP Lawyers (Respondent) File Number(s): COM 14/59343 Publication restriction: Nil

REASONS FOR DECISION 1. This is an application under s 32A(12) of the Retail Leases Act 1994 (the Act) to set aside a decision of two specialist valuers on two grounds. The initial ground is that the valuers have 'manifestly made a fundamental error warranting such an order'. The second ground is that one of the valuers appointed is not a specialist valuer and such appointment was null and void. 2. The background to this matter is that the applicant is the agent for the current lessor and the respondent is the lessee under a lease of premises known as Shops *** Plaza (the premises), commencing on 1 September 2007 for a period of seven years with an option to renew for a further seven years (the lease). The original lessor, JP Morgan Trust Australia Ltd, transferred its interests in the premises ultimately to BNY Trust Company of Australia Ltd. 3. On or around March 2014, the respondent took an assignment of the lease. At the time of the exercise of the option of the new term under the lease, the current rental being paid by the respondent was $257,877.00 net rental excluding GST ($724.33 per square metre net). 4. The applicant made an application to the Tribunal under s 19(1A) of the Act for the appointment of a specialist valuer. Mr Glen Cremer of Austreal was appointed by the Tribunal as a specialist valuer and provided a report dated 1 August 2014 (the Cremer Report) that determined that the current market rent for the premises was $266,088.00 per annum net excluding GST ($745.30 per square metre net). 5. On 28 August 2014, the respondent applied to the Tribunal under s 32A(1) of the Act to have the Cremer Report set aside and two specialist valuers to review the Cremer Report. On 30 September 2014 Mr Phillip Barlow FAPI (Mr Barlow) and Mr Pierre Dupre FAPI (Mr Dupre) were appointed by the Tribunal to review the Cremer Report. On 17 November 2014, Mr Barlow and Mr Dupre (the joint valuers) delivered their determination (the Joint Report) that the market rent for the premises was $202,644.00 net excluding GST ($567.00 per square metre net). 6. On 9 December 2014, the applicant filed a 'request for order' requesting that the Joint Report be set aside alleging that the joint valuers made 'a manifest error in valuation judgment' (the application). On 15 December 2014, the applicant filed submissions with the Tribunal to support the application. 7. On 19 December 2014, the parties appeared before me at a directions hearing where I made directions for the filing of a revised submission from the applicant and submissions in response from the respondent based on the matters that were raised by the applicant in seeking to have the Joint Report set aside. 8. Subsequently, as a result of the applicant's submissions dated 23 January 2015, at the next directions hearing on 17 February 2015, I asked for further submissions to be made. The applicant submitted that the Joint Report be set aside as Mr Dupre, in accordance with those submissions, was not registered as a speciality retail valuer as at the date of his appointment (source API website, 23 January 2015) and consequently was not a person that the Tribunal could have appointed under s 72AB(2) of the Act. 9. At the directions hearing on 7 April 2014, I asked the applicant to provide evidence regarding the assertions that Mr Dupre was not an appropriate person to be appointed under the Act. The parties were directed to file further submissions and then the matter was reserved on the papers. 10. The relevant sections of the Act are as follows: Section 32A – review of current market rent determinations (1) Application for review A party to a lease may apply to the Tribunal for the appointment of two specialist retail valuers to conduct a review of a determination of the current market rent made by a specialist retail valuer made under section 19 or 31. (12) The Tribunal: (a) may, on application made by a party to the lease within 21 days after the decision of the specialist retail valuers is given, order that the decision be set aside, if satisfied that the valuers have manifestly made a fundamental error warranting such an order, and (b) may also order that the costs of the review are not payable by the parties or, if paid, are to be refunded. The decision is not otherwise reviewable by or appellable to the Tribunal. Section 72AB - Powers of the Tribunal relating to appointment of specialist retail valuers (1) The Tribunal may appoint: (a) a specialist retail valuer, on application under section 19 or 31, or (b) two specialist retail valuers, on application under section 32A. (2) The appointment of a specialist retail valuer is to be made from separate lists of nominees prepared separately by the persons for the time being holding or acting in the Offices of President of the Australian Property Institute (NSW) and President of the Real Estate Institute (NSW). A specialist retail valuer is defined under section 3 of the Act as follows: Specialist retail valuer means: (a) for the purposes of a valuation under this Act relating to a retail speciality shop in a retail shopping centre having both: (i) 20 or more retail speciality shops, and (ii) a total of lettable areas of retail speciality shops that exceed 1,000 square metres, a valuer having not less than 5 years' experience in valuing retail speciality shops in shopping centres of that kind, or (b) for the purposes of a valuation under this Act relating to any other retail speciality shop or any other retail shop, a valuer having not less than 5 years' experience in valuing retail shops.